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Aussiewood Under Siege: Can Mel Gibson and Tax Incentives Save the Industry from Trump’s 100% Movie Tariffs?

Clyde MorganWednesday, May 7, 2025 6:34 pm ET

33min read

The global film industry faces unprecedented upheaval as U.S. President Donald Trump’s proposed 100% tariff on foreign-made movies threatens to upend Australia’s thriving film sector, dubbed “Aussiewood.” With productions like Godzilla x Kong: The New Empire and Mad Max: Fury Road relying heavily on Australia’s tax incentives and skilled workforce, the tariffs could cost the country billions and destabilize its status as “Hollywood Down Under.”

The Tariff’s Economic Toll on Australia

Australia’s film industry generates $1.7 billion annually, with international productions accounting for nearly 45% of that total ($767 million) in 2023–24. Tax incentives—including a federal 30% rebate for eligible expenditures and state-level rebates (up to 15%)—have made locations like Queensland’s Gold Coast and New South Wales’ Bondi Beach magnets for global studios. Major films like Thor: Ragnarok and The Fall Guy have leveraged these incentives to cut costs, but the proposed tariffs could erase those savings.

Disney, a major investor in Australian productions, saw its stock dip 3% in early 2025 amid tariff fears. Analysts warn that studios may relocate to tariff-exempt regions or pivot to streaming, bypassing theatrical releases entirely.

Mel Gibson’s Crossroads: A Symbol of Industry Struggles

Mel Gibson’s planned The Resurrection of the Christ—filming in Italy—illustrates the globalized nature of modern filmmaking. Yet even co-productions like Australia’s The Brutalist (a Hungarian-U.K.-U.S. collaboration) face existential risks. If tariffs apply retroactively or to international co-productions, studios may abandon projects altogether.

The Australian government has no clear contingency plan. While Prime Minister Anthony Albanese vows to “protect cultural sovereignty,” Screen Producers Australia CEO Matthew Deaner notes the “many unknowns” of enforcement. For instance:
- Would tariffs apply to streaming content (e.g., Netflix’s Squid Game)?
- How would “foreign production” be defined for films shot in multiple countries?

The Global Backlash and Legal Uncertainties

The EU, which absorbs 71% of U.S. film exports, has warned of retaliatory tariffs. The U.S. film industry, which holds a $15.3 billion global trade surplus, could face a collapse in European markets if tit-for-tat tariffs materialize. Meanwhile, legal experts question the tariff’s enforceability, as films are classified as intellectual property (IP) rather than physical goods. Lawsuits are anticipated, with Australia’s government likely to join challenges.

Investment Risks and Opportunities

Short-Term Risks:
Job losses: Over 100,000 Australian jobs depend on film production.
Budget cuts: Studios may slash costs or shift to AI-driven digital production.
Trade tensions: The U.S. may target Australian exports (e.g., wine) in retaliation for local content quotas.
Long-Term Opportunities:
Local Content Boom: Australia’s proposed 20% revenue reinvestment rule for streaming platforms (delayed until 2026) could boost domestic storytelling.
Diversification: Producers like Robert Connolly (The Dry) advocate focusing on niche markets or regional co-productions (e.g., Asia-Pacific collaborations).

Australia’s film exports peaked at $2.4 billion in 2022–23, but this could drop by 30–50% if tariffs take effect.

Conclusion: A Crossroads for Cultural and Economic Survival

The U.S. movie tariff represents a existential threat to Australia’s film industry. With $767 million in annual revenue and over 100,000 jobs at risk, the stakes are clear. While legal challenges and global backlash may delay implementation, the industry must act now:

Lobby for Exemptions: Pressure the U.S. to exclude Australia from tariffs, citing its role as a net importer of Hollywood content.
Boost Local Content: Accelerate the 2026 content quota rules to reduce reliance on foreign productions.
Diversify Markets: Expand partnerships with Asia-Pacific nations and invest in digital-first platforms immune to physical tariff rules.

Without swift action, “Aussiewood” could become a casualty of protectionism—costing Australia its cultural influence and economic vitality. The clock is ticking.

JR Research analysts recommend monitoring DIS (Disney) and local Australian film stocks (e.g., Village Roadshow) for tariff-related volatility.

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