Tariffs in the Entertainment Industry: How Trump's Film Industry Measures Could Impact Books and the Global Creator Economy

The New Tariff Landscape

President Donald Trump's announcement of a 100% tariff on foreign-made movies imported into the United States recently shook the entertainment industry. Citing concerns that the "American movie industry is dying a swift death" due to incentives offered by other countries to lure filmmakers away, Trump framed this as a national security issue. The administration has instructed the Department of Commerce and the United States Trade Representative to begin implementing these measures, though specific details on enforcement remain scarce. 

This move represents a significant expansion of Trump's trade policies into intellectual property and services, where the United States has traditionally maintained substantial trade surpluses. While the immediate focus has been on the film industry, the announcement has raised serious questions about whether similar measures could soon target other creative sectors, including book publishing.

These developments warrant close attention for independent authors, publishers, and the broader creator economy in publishing, many of whom operate globally as digital nomads or independently of physical locations. This article examines the potential implications of these tariff measures for the book publishing industry, explores possible scenarios, and offers guidance for navigating this evolving landscape.

The Film Industry Tariff: Understanding the Precedent

Trump's plan to impose a 100% tariff on movies produced overseas is notable for its lack of specifics. Industry experts are trying to understand how such a measure would work. Key questions remain unanswered, including whether the tariff would apply to films shot overseas but finished in the US, or how it would affect international content available on streaming platforms. 

The entertainment attorney Stephen Weizenecker noted, "If you get any sort of significant tariff, 10% or 20%, it takes away whatever production incentive there was for filming outside the United States". However, traditional enforcement mechanisms like customs inspections would face significant challenges with digital goods licensed, streamed, or distributed through borderless cloud infrastructure.

The film industry has already been grappling with the implications for major upcoming releases filmed abroad. Productions like "Mission: Impossible – The Final Reckoning," which tapped tax credits in the UK, and "A Minecraft Movie," shot primarily in New Zealand and Canada, could face significant financial impacts. Industry executives wonder if established productions will be grandfathered in with a grace period or if they'll be immediately subject to the new tariffs.

Why Trump Targeted the Film Industry: Motivations Behind the Movie Tariffs

Trump's stated rationale for targeting the film industry centers on what he described as a "swift death" of the American movie industry due to incentives offered by other countries to attract filmmakers away from the United States. Filmmakers were lobbying for tax incentives to boost output in Los Angeles for a long time. In his announcement, he characterized this as "a concerted effort by other Nations and, therefore, a National Security threat" that constitutes "messaging and propaganda." 

This move coincides with growing concerns about productions moving outside Los Angeles. A survey by ProdPro found California was only the sixth most preferred place to film in the next two years, behind Toronto, Britain, Vancouver, Central Europe, and Australia. Hollywood producers and labor unions have urged California's Governor Gavin Newsom to boost tax incentives to better compete with these locations. 

Behind the scenes, the tariff announcement followed meetings at Mar-a-Lago between Trump and his "Hollywood ambassador" Jon Voight, along with special advisor Steven Paul and media executive Scott Karol. This group had been discussing various ideas to revive domestic film and TV production, including federal tax incentives, tax code changes, and imposing tariffs "in certain limited circumstances." 

Several additional factors may have influenced the decision to target the film industry specifically:

1. Symbolic Value: Hollywood represents American cultural influence globally, making it a high-profile industry that resonates with Trump's "America First" messaging.

2. Employment Concerns: The New York Times reported that the industry has lost more than 18,000 jobs domestically in the last three years, creating economic anxiety that aligns with Trump's focus on domestic job creation.

3. Political Dynamics: In his comments, Trump specifically mentioned that "Hollywood is being destroyed. You have a grossly incompetent governor that allowed that to happen," suggesting political motivations in targeting an industry associated with California. This state has often been at odds with Trump's policies. 

4. Content Control: Framing foreign film production as "messaging and propaganda" that constitutes a "national security threat" suggests cultural influence and content control concerns. By characterizing foreign-made films as potential vehicles for propaganda, Trump introduced a new justification for trade barriers that extends beyond purely economic reasons.

It's worth noting that despite the production shifts overseas, the U.S. entertainment industry still exports three times as much as it imports, according to Bloomberg. This makes the national security and economic arguments for tariffs particularly notable, as they target an industry where America maintains a substantial trade surplus. 

This move to impose tariffs on a creative industry represents a significant expansion of trade policy tools into new domains. While previous tariffs primarily targeted manufacturing and physical goods, this extension into intellectual property and creative services signals a willingness to use trade policy to shape cultural industries, not just traditional economic sectors.

If similar reasoning were applied to books, particularly those printed abroad or authored by international writers, it could create precedents for treating literary works not just as commercial products but as potential vehicles for foreign influence that might warrant trade restrictions. This makes understanding the motivations behind the film tariffs significant for the publishing industry as it assesses its potential vulnerabilities.

Could Books Be Next? Examining the Publishing Industry's Vulnerability

While the recent tariff announcement hasn't explicitly targeted books, there are several reasons the publishing industry should be watching these developments closely:

The Trump administration has already implemented tariffs on goods from Canada, Mexico, and China, which has created uncertainty in the publishing sector. President Trump's 25% tariffs on goods from Mexico and Canada, along with increased tariffs on imports from China, went into effect earlier this year and have left publishers and printers with more questions than answers about what these levies mean for their businesses, according to Publishers’ Weekly.  

These existing tariffs, particularly on books printed in China, are already increasing production costs, impacting pricing strategies, and potentially limiting accessibility for readers. The publishing industry faces significant challenges, with concerns about the long-term effects on accessibility and literacy. 

Industry experts believe that tariffs will likely increase the price of books and shipping costs, primarily due to their impact on the cost of producing books. Imported paper and ink (except those from Canada and Mexico if USMCA-compliant) are facing higher costs, and potential increases in fuel prices could further affect the industry. Even small input cost increases might push book prices up 5%-10%. 

Comics publisher Eric Reynolds succinctly summarized the concerns: "Tariffs will do nothing but result in higher costs for us and higher prices for consumers, because we'll still be forced to print overseas. Already, slim profit margins will be slimmer."

The Global Creator Economy in Publishing: Unique Vulnerabilities

The creator economy in publishing - authors, editors, designers, marketers, and publishers - has become increasingly global and decentralized. Many professionals work as digital nomads or independently of physical locations and offices. This international, distributed model creates unique vulnerabilities and potential adaptations in response to trade barriers. 

Independent authors operating across markets face uncertainties that could impact their publishing and pricing strategies. While books have thus far been relatively protected, the situation remains volatile. The Alliance of Independent Authors warns that tariffs can be imposed or lifted with little warning, leaving self-publishers who rely on international printing and distribution in a precarious position. 

The impact extends beyond production costs to the mobility of authors themselves. Some authors have already begun canceling international book tours due to concerns about border restrictions, opting instead for virtual events. Romance novelist Ali Hazelwood, for instance, canceled her UK tour, citing complications related to safely traveling outside and then back into the US.

The stakes are high for international publishers, such as those in Canada. Canadian publishers have warned that without meaningful support from readers, retailers, and government, they risk losing ground in key markets, undermining an industry that brings the voices of hundreds of authors to worldwide audiences. The impact extends beyond publishing, as books from other countries often showcase landscapes, wildlife, outdoor adventures, and cultural heritage that fuel tourism and cultural exchange.

Potential Impacts on Different Segments of the Publishing Industry

The effects of potential tariffs would not be felt equally across all segments of the publishing industry:

Major Publishing Houses

Large publishers would likely face higher expenses when bringing products into the United States, particularly for high-quality illustrated books, graphic novels, and deluxe hardcovers, which are often produced overseas due to specialized printing capabilities and cost efficiencies. However, these companies generally have more resources to absorb costs or adjust their supply chains.

Independent Publishers and Self-Published Authors

Independent publishers and self-published authors would likely face greater difficulties as they typically work with smaller budgets and have fewer resources to adapt to a changing landscape. Rising costs could reduce the diversity of books available to readers as smaller operations struggle to remain financially viable. 

Specialty Publishing

Specific segments of the industry, such as religious texts, could be particularly vulnerable. For instance, a significant tariff on Bible imports could lead to shortages and increased prices, impacting churches, nonprofits, and religious organizations that rely on affordable access to these materials. Children's and religious books, such as the Bible, are currently excluded from tariffs, at least for now.  

Global Authors and Digital Nomads

For authors working independently of physical locations, the impacts would be multilayered:

1. Production Costs: Authors who self-publish physical books through print-on-demand services might face higher production costs if tariffs affect these services' global supply chains.

2. Market Access: Retaliatory tariffs from other countries could reduce export opportunities for US-based authors.

3. Cross-Border Business: Authors who frequently cross borders for business could face additional complexities in their publishing operations.

Strategic Responses for Publishers and Authors

In the face of these potential challenges, publishers and authors have several possible strategies to consider:

The Alliance of Independent Authors recommends that indie authors audit their print supply chains to understand where their books are printed and shipped from, stay informed about trade policy developments, and consider expanding into formats like ebooks and audiobooks largely unaffected by physical trade barriers. If they sell directly to consumers, whether it is through Kickstarter or Shopify, there are certain tips and guidance by Kickstarter that might help navigating tariffs. 

For the publishing industry more broadly, potential solutions include investing in local printing capacity, advocating for policy changes such as exemptions on book tariffs to protect accessibility and literacy, and developing new business models that can adapt to an increasingly complex global trade environment. 

Canadian publishers have outlined several strategies that could serve as a model for others, including seeking export support grants to offset tariffs and shipping costs, developing market expansion programs to reduce dependence on any single market, continuing investment in digital publishing formats, and strengthening domestic retail and distribution networks. 

The Case for Books as Cultural Goods

There is precedent for books receiving special treatment in trade policy. Books have been among the categories eligible for exemptions under the International Economic Emergency Powers Act (IEEPA), which was used for Trump's recent tariff orders. A recently released federal document showed that "printed matter" was not subject to specific tariffs, a list that specifically mentioned printed books and children's picture, drawing, and coloring books. 

The Alliance of Independent Authors notes that books are cultural goods with educational and societal value and should be treated as such in global policy. This argument has successfully exempted books from some earlier tariff rounds. 

This special status provides hope that even if tariffs expand to other creative sectors, books might continue to receive exemptions or special considerations. However, as the film industry is discovering, nothing is specific in the current trade environment.

Books as Affordable Escape: The Reading Advantage in Uncertain Times

As tariffs threaten to increase the cost of various entertainment options, books, particularly in digital formats, may emerge as one of the most accessible and affordable forms of escape for consumers. This pattern has historical precedent, with reading as a crucial coping mechanism during previous periods of global uncertainty.

During times of crisis, the value of books as an accessible form of entertainment becomes particularly apparent. The book industry has already seen how external pressures can affect reading habits and consumption patterns, with many readers turning to books as a source of comfort and escape during difficult periods.

The COVID-19 Parallel

During the COVID-19 pandemic, book sales saw remarkable resilience and even growth in many markets despite economic challenges. Several factors from that period may prove instructive for the current situation:

• Value Proposition: Compared to other entertainment options, books, especially e-books, offer hours of engagement at a relatively low cost-per-hour, making them attractive during economic uncertainty.
• Accessibility: Digital books require no physical shipping or delivery, circumventing potential supply chain disruptions caused by tariffs and trade tensions.
• Psychological Benefits: Reading fiction has been shown to reduce stress and provide mental escape—something particularly valuable during times of societal tension.

Cost Comparison with Other Entertainment

As other entertainment options potentially face price increases due to tariffs, book publishers carefully consider price points based on consumer willingness to pay. Even premium hardcover books typically retail between $25-35 before discounts, which compares favorably to other entertainment experiences when calculated cost-per-hourly. 

Consider the relative value:

• A two-hour movie ticket at a premium theater could cost $15-20 per person
• A single video game may cost $60-70
• Monthly streaming subscriptions for film and TV can range from $10-20 each
• A book, particularly in e-book format ($10-15) or paperback ($15-20), can provide 8-20 hours of entertainment

If tariffs drive up costs for foreign-made films by 100%, theatrical releases and streaming services may need to increase prices to compensate, making the relative value proposition of books even stronger.

Publishing's Adaptability Advantage

The publishing industry has several advantages that help it serve as a stable entertainment option during unstable times. Publishers can respond to tariff challenges by investing in local printing infrastructure, shifting to digital-first publishing models, and developing new distribution approaches that minimize cross-border friction. 

While some price increases for physical books may be unavoidable due to rising costs of imported paper and printing materials, these increases are likely to be more moderate (estimated at 5-10%) compared to the potential doubling costs for tariff-affected films. 

Opportunity for PublishDrive Authors and Publishers

For PublishDrive partners, this situation presents a unique opportunity to position books as the entertainment of choice during uncertain times. Marketing strategies could emphasize:

• The exceptional value books offer as an entertainment option
• The emotional and psychological benefits (considered as ‘escape’) of reading during stressful periods
• The minimal vulnerability of e-books to tariff-related price increases
• The accessibility of reading as an activity that requires no special equipment beyond devices that many already own

By highlighting these advantages, publishers can weather the economic challenges posed by tariffs and potentially gain market share from other entertainment sectors that may be more severely impacted.

The Historical Pattern

This wouldn't be the first time books have served as affordable escapes during difficult periods. During the Great Depression of the 1930s, library usage soared. During World War II, pocket books became popular with deployed soldiers. And as noted above, reading saw a significant resurgence during COVID-19 lockdowns.

In each case, books provided not just entertainment, but comfort and connection when both were in short supply. As tariff walls rise and global tensions increase, books may once again serve as bridges - both between readers and new worlds of imagination, and between people separated by economic and political barriers.

The Digital Advantage: How E-Publishing Might Weather the Storm

The publishing industry's significant advantage over film is its well-established digital ecosystem. E-books and audiobooks represent a growing segment of the market and face fewer direct impacts from tariffs on physical goods:

Digital formats like e-books and audiobooks remain largely unaffected by tariffs on physical goods, potentially offering publishers and authors a more stable revenue stream during trade uncertainties. The Alliance of Independent Authors encourages indie authors to build "digital resilience" through these formats. 

Publishers with strong digital strategies may be better positioned to weather potential tariff impacts, potentially accelerating the industry's shift toward digital-first or digital-heavy publishing models.

Considerations for PublishDrive Authors and Publishers

For authors and publishers using PublishDrive's platform, several specific considerations emerge:

1. Global Distribution Strategy Review: International authors and publishers should review their current strategy to identify potential tariff vulnerabilities, particularly for print books.

2. Format Diversification: Consider expanding into or emphasizing digital formats like e-books and audiobooks, which are less vulnerable to physical trade barriers.

3. Print-on-Demand Location Awareness: When using print-on-demand services, be aware of where books are being printed and consider options that minimize cross-border shipping when targeting specific markets.

4. Pricing Strategy Flexibility: Develop flexible pricing strategies that absorb potential cost increases without undermining competitiveness.

5. Market Diversification: Reduce dependence on any single market by expanding into multiple territories, spreading risk across trade relationships.

The Broader Context: Creative Industries in Trade Policy

Trump's movie tariff announcement represents a significant shift in how creative outputs are treated in trade policy. Films are intellectual property, not physical goods, representing a service that has not traditionally been subject to tariffs. This move into taxing services rather than just goods signals a seismic shift in trade policy. 

This approach could fundamentally alter how creative industries operate globally if it extends to other creative sectors. The notion that creative outputs represent not just commercial products but potential "messaging and propaganda" that constitutes a "national security threat" introduces a concerning precedent for how cultural goods might be treated in international trade.

Conclusion: Navigating Uncertain Waters

As one industry publication noted regarding the film tariffs, it remains to be seen "how likely is it that Trump's movie tariff will endure in its initial, blunt and far-reaching form, or will it eventually get watered down like many of his other art-of-the-dumb-deal opening gambits?" The same question applies to any potential extension of tariffs to books and other creative sectors.

With its distributed workforce of authors, editors, designers, and publishers working across borders, the global creator economy in publishing faces uncertainty that requires vigilance, adaptability, and strategic thinking.

For PublishDrive authors and publishers, staying informed about policy developments, diversifying both formats and markets, and building flexibility into business models will be key to navigating these choppy waters. While the full impact of current and potential future tariffs remains to be seen, preparation now can help mitigate future disruptions.

The publishing industry has weathered numerous technological and economic shifts over its long history. With thoughtful adaptation and advocacy for the unique cultural value of books, it can also navigate this latest challenge.