On May 5, 2025, former U.S. President Donald Trump issued a bold statement on his social media platform, Truth Social, declaring that the coordination of multiple countries poses a significant threat to U.S. national security, particularly concerning media and propaganda. This assertion came alongside his announcement to impose a 100% tax on films produced abroad and imported into the United States. "We want films to come back to production in America," Trump emphasized, underlining his administration's commitment to revitalizing the domestic film industry.
Trump's directive has been authorized to agencies, including the Department of Commerce, to begin the immediate process of implementing this hefty tax. Secretary of Commerce Howard Lutnick echoed this sentiment on social media platform X, stating, "We are proceeding." However, neither Trump nor Lutnick provided specific details regarding the implementation of these taxes.
The film industry has been in a precarious state, especially in Los Angeles, where FilmLA reports a staggering nearly 40% decline in film and television production over the past decade. This downturn comes as various countries around the world have been rolling out generous incentives to attract production activities, contributing to a significant portion of the estimated $248 billion spent on global content production, as highlighted by Ampere Analysis.
In a separate but related economic development, S&P Global released a report on the same day detailing the Purchasing Managers' Index (PMI) for Vietnam's manufacturing sector for April 2025. The report reveals a concerning trend: significant declines in output, new orders, and employment, with business sentiment hitting its lowest point since August 2021. The PMI dropped to 45.6 points, down from 50.5 points in March, indicating a marked deterioration in the health of the manufacturing sector.
The report attributes this decline primarily to the announcements of tariffs by the United States, which have had a profound impact on Vietnam's manufacturing landscape. The decrease in new orders was particularly striking, reversing a previous upward trend and marking the fastest decline in nearly two years. Survey respondents indicated that the drop in new orders was a direct reflection of the U.S. tariffs and the volatility in the international market.
New export orders saw an even steeper decline, marking the sixth consecutive decrease and the most significant drop since June 2023. This ongoing trend has raised concerns among manufacturers, who are now grappling with the implications of reduced orders on their production capabilities. The decline in output was noted to be the fastest since January 2023, further illustrating the challenges facing the sector.
As companies faced dwindling orders, business confidence plummeted, reaching levels not seen since August 2021. The report highlights that backlogs of work have also decreased sharply due to the falling number of new orders, prompting manufacturers to cut jobs for the seventh consecutive month. The rate of job reduction was reported to be the most rapid in three and a half years, indicating a significant contraction in the labor market.
In light of these challenges, companies have been compelled to reduce their purchasing activities, leading to the largest decrease in procurement since May 2023. The report notes that input costs have continued to rise, albeit at a slower rate, with some firms reporting decreases in oil prices and transportation costs. Despite these fluctuations, selling prices have fallen for the fourth consecutive month, with the pace of decline being the fastest in 21 months.
Andrew Harker, the Director of Economics at S&P Global Market Intelligence, commented on the findings, stating that the U.S. tariffs have significantly impacted Vietnam's manufacturing sector, pushing it into a decline during April. Companies are now facing substantial decreases in new orders, exports, and overall output. Harker emphasized the importance of monitoring PMI data in the coming months to assess how business conditions evolve in this unstable environment.
As both the U.S. and Vietnam navigate these economic challenges, the implications of Trump's proposed tax on foreign films and the ongoing tariff situation will likely reverberate through the global market. The film industry in the U.S. may see a shift as production begins to favor domestic projects, while Vietnam's manufacturing sector grapples with the fallout from reduced orders and declining business confidence.
The intersection of these economic policies highlights the complexities of global trade and the interconnectedness of national economies. As countries vie for competitive advantages, the impacts of tariffs and tax incentives will continue to shape the landscape of industries worldwide.
In the coming weeks and months, stakeholders in both the film and manufacturing sectors will be watching closely to see how these developments unfold and what strategies can be employed to mitigate the adverse effects of such sweeping policy changes. The future of production in both sectors remains uncertain, with ongoing adjustments likely as markets respond to these new realities.
