Call it another day in the second Trump era: we all got to wake up on Monday morning for another round of exclamations of “What??” and “Why?!?”
This time, Trump has apparently been convinced that the American film industry desperately needs saving, and that this is another case where the public policy lever Trump loves most (tariffs) can help.
The announcement-via-social-media-post Sunday night, that Trump was implementing a 100 per cent tariff on foreign-made films, was like a cannon shot in the Canadian film and television industry, which relies heavily on productions for U.S. studios and streaming companies. (The Star Trek franchise, for example, is practically Canadian content now, which makes some of us Canadians very happy indeed.) If it were a serious threat, a tariff on non-U.S. film and TV production would be specifically devastating to Toronto and Vancouver, though the effects would hardly be limited to those cities.
The Ford government’s stance for now is to wait and see what happens.
“I’m hoping that his Sunday night post will be followed up by a Monday morning briefing that tells him how important this industry is,” said Minister of Tourism, Culture and Gaming Stan Cho at Queen’s Park on Monday. “We’ve seen this type of behaviour from the president before: he’ll say one thing one day and the next day he’ll change his mind.”
The good news seems to be that in this specific case, the Trump administration is likely to find itself constrained by law and its own political choices. For starters, to date, Trump has used the powers delegated by Congress under the International Economic Emergency Powers Act, a Nixon-era law that gives the president broad powers over tariffs in cases where there’s a specific emergency the president needs to address. This is also (probably) why Trump announced tariffs against Canada as a response to fentanyl: for propriety’s sake, the law requires that the president offer some kind of justification, so Canada became a victim of Trump’s bizarre stream of consciousness.
The powers of the IEEPA are not unlimited, however, and in 1988 Congress specifically carved out foreign media from the president’s powers. The language of the 1988 exemption is extremely broad: “regardless of format or medium of transmission, of any information or informational materials including but not limited to, publications, films, posters, phonograph records, photographs, microfilms, microfiche, tapes, compact disks, CD ROMs, artworks, and news wire feeds.” So Trump’s favourite hammer can’t, in fact, be used to strike this particular nail.
The Trump presidency hasn’t been overly constrained by the niceties of American judicial review thus far, but if we can say one thing about the handful of Hollywood movie studios left after generations of business mergers, it’s this: they have lots of expensive lawyers on call, and the ability to get more in a hurry when needed. Trump can (sadly) get away with violating the rights of lots of vulnerable people, but he will face a totally different level of resistance when Disney, Netflix, and other film and TV giants see a threat to their business model.
That doesn’t exhaust the universe of potential tools the U.S. government could bring to bear if it really wants to re-shore film and TV production, but it does change the relevant (political) actors. Instead of tariffs, we could talk about tax incentives implemented by Congress. There are already a diverse number of state-level tax credits — indeed, California’s position for a generation or so has been that other states have stolen jobs that properly belong to the Golden State — and other jurisdictions have incentives of their own (including Canada, both nationally and provincially). So other countries could hardly cry foul.
The difficulty for Trump is that congressional Republicans are already having a hard enough time writing a budget this year that incorporates their desire to pass or extend large tax cuts, cut spending, increase military spending, all while appeasing radicals in the deepest-red states and simultaneously not doing anything too unpopular with voters in purple districts. They may or may not succeed, but it becomes more difficult with each incremental job the budget is asked to do.
Already, some of the brainstorms Trump had during the campaign — no taxes on tips! No taxes on overtime! — are likely to be included in the most attenuated forms, if at all. The idea that Congress is, this late in the bargaining process, going to include a tax incentive for U.S. film and TV large enough to divert substantial production away from Canada is difficult to imagine.
All of which is to say that while there are undoubtedly things that the U.S. government might do to harm foreign film and TV productions, including those in Canada, at this moment, Trump is constrained by what the law allows and what his political coalition can afford. Mercifully for Canadian workers in these industries, the various dysfunctions of American governance are working in our favour for once.