By Carl Tannenbaum

Few leading men of the 1960s and 1970s were more dashing than Clint Eastwood.  He played a series of gritty heroes, trying to do right in a world gone wrong.

Some of Eastwood’s early movies were set on the American frontier.  In realty, they were filmed in Italy, as part of a collection that became known as “spaghetti Westerns.” Producers favored that location because costs were lower and content was regulated more lightly. 

If a sequel to The Good, The Bad, And The Ugly were released later this year, tickets could be pretty expensive.  The White House recently proposed placing 100% tariffs on film productions completed overseas, to prevent the American movie industry from “facing a very fast death.” But such a move could backfire very easily.

The American film industry has been navigating through a series of significant changes.  While nearly 70% of the world’s films are produced by U.S. studios, that share is substantially lower than it was 15 years ago.  Developments like streaming and the use of artificial intelligence have introduced new challenges.  Two years ago, actors and screenwriters went on strike for about five months, with little to show for it.  During the stoppage, the offshoring of production accelerated.

It is far from clear how a tariff would be applied to this situation.  Movies are intellectual property, which does not pass through ports for tariff collection like goods do. Distributors can be located almost anywhere.  Many foreign countries have a big appetite for American entertainment; they could retaliate against movie tariffs by taxing tickets or restricting distribution.

More broadly, the Administration might do well to avoid bringing services into the ongoing trade conflict.  The United States runs a trade surplus in services, and therefore stands to lose more if tariff battles extend to these sectors.

As the situation illustrates, import taxes are not the solution to all of the country’s economic problems. If the President tries to play The Enforcer and collect A Fistful of Dollars by hitting movies with tariffs, he may find himself In the Line of Fire.