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The US administration’s announcement to impose a 100% tariff on films produced outside of Italy marks a significant turning point in trade relations between the United States and Europe. This measure, coming amid tensions in cultural and regulatory exchanges, risks profoundly undermining the competitiveness of the European film industry, and particularly the Italian one. The decision is a direct response to EU policies that require streaming platforms operating in the EU to reserve significant portions of their libraries for European content and to reinvest part of their profits in local production.
EFFECTS ON TRADE FLOWS AND EXPORTS
The new tariff barrier builds on a trend already marked by a decline in Italian exports. According to the latest data released by ISTAT in recent days, Italian sales to the United States decreased by 21.2% year-on-year in August, while the overall decline in non-EU exports affected nearly all major trading partners, peaking at -26.1% in Turkey. Against these negative figures, only the United Kingdom (+4.9%) and Switzerland (+4.7%) showed positive trends. Significantly, imports from the United States grew by 68.5% in the same period, accentuating the trade imbalance and reducing the surplus with non-EU countries to €1.777 billion, compared to €2.794 billion the previous year.
THE VULNERABILITY OF THE FILM INDUSTRY
The European audiovisual sector, which brought 4.8 million titles to US screens in 2023, is now exposed to the threat of effective marginalization. American distribution represents a key revenue component for many European productions, especially for big-budget “event films,” whose box office revenues are largely dependent on foreign markets. The imposition of such extensive tariffs would drastically increase costs for US importers, inevitably resulting in reduced accessibility and competitiveness for European works in US theatres and on platforms.
THE IMPACT ON ITALY
For the Italian film industry, historically characterized by a strong propensity for international co-production and a significant dependence on the export of titles as a cornerstone of economic sustainability, the introduction of such restrictive tariff measures critically erodes the industry’s structural foundations. This vulnerability is amplified by the role that foreign markets, particularly North America, play in rebalancing production budgets and in international artistic recognition. The consequences of this impact are not limited to primary production but ripple systemically, generating a negative domino effect throughout the entire supply chain: from distribution to post-production, all the way to ancillary services. In this context, the observed deterioration in exports to the United States should not be interpreted as a simple cyclical trend, but rather as a leading indicator of the growing and profound difficulties Italian producers will face in maintaining their competitiveness. Further stress factors include the convergence of punitive trade barriers – such as tariffs – and adverse fluctuations in the euro-dollar exchange rate. The documented average 10% variation in the latter index over the last twelve months significantly exacerbates financial pressure. This dual constraint translates into a drastic decrease in operating profit margins and seriously challenges the long-term sustainability of initiatives oriented towards the transnational market.
GLOBAL DYNAMICS AND INDUSTRIAL STRATEGIES
Another factor to consider is the established practice of major US production companies to use foreign locations to benefit from tax incentives and lower production costs. The adoption of tariff barriers contradicts these global dynamics, risking fuelling tensions not only with European partners, but also with countries such as Canada and the United Kingdom, which host major production hubs. It is, therefore, crucial for the European industry to develop strategies to diversify its outlet markets, strengthen intra-EU distribution channels and increase cooperation with emerging markets in order to reduce dependence on the US market. The introduction of 100% tariffs on foreign films by the United States is not only a protectionist trade measure, but also a direct attack on the principle of international cultural circulation. The consequences for the European and Italian film industries are likely to be severe, amplifying the already evident difficulties associated with declining exports and currency fluctuations. In this scenario, strengthening European policies supporting the audiovisual sector appears essential to ensure the competitiveness and survival of a strategic sector not only for the economy, but also for the continent’s cultural identity.