Could Trump’s film tariffs bode well for New Mexico?

For Tim Pipher, opening a film studio in New Mexico was a no-brainer. Now, with President Trump’s proposed tariffs on films made outside the United States, that could mean more advantages for filming in the state.

But “it could really go either way,” said Pipher, owner of ABQ Castle Studios.

The president is authorizing the U.S. Department of Commerce to begin the process of instituting a 100% tariff on films produced outside of the U.S., he said in a May 4 post on his social media platform, Truth Social.

“The Movie Industry in America is DYING a very fast death,” Trump wrote. He said incentives from foreign countries are pulling film operations overseas, contributing to the film slowdown in Hollywood and other local film hubs, as well as posing what he says is a threat to national security.

The proposed tariffs, which the White House said have not been formally decided, sent the nation’s film industry into shock. It also had some questioning: What could this mean for New Mexico?

“On one hand, if there’s an advantage to filming in New Mexico versus Canada or Bulgaria or the UK, that’s going to help my business,” Pipher said. “On the other hand ... if these foreign countries put on retaliatory tariffs to the point that American films can’t be sold overseas, then that’s going to hurt, and less productions will be done.”

The announcement comes amid an industry-wide lull that started with the COVID-19 pandemic and was further fueled by the 2023 Writers Guild of America strike. While numbers don’t yet exist for the current fiscal year’s production count, New Mexico Film Office Director Steve Graham said the decline has been felt by the state’s film industry in recent months.

“Worldwide, there’s been a contraction in the industry, and we’re experiencing it just like everyone else,” Graham said. “In addition to the slowdown worldwide ... a larger percentage of those productions that are happening have been going overseas.”

New Mexico’s film industry has seen a decline in productions since hitting a five-year peak of 109 productions in the 2022 fiscal year, according to a report from the New Mexico Film Office. That number dropped to 83 film projects in fiscal year 2023 and 62 film projects in fiscal year 2024.

The tariffs are a “bad idea” and would not work with intellectual property, said Milton Riess, the film department chair at Santa Fe Community College.

He said many U.S. production companies operate partially overseas, and many foreign companies have significant holdings in U.S. production companies. Oftentimes, he said, they might partner up to film something partially stateside and partially in other countries. He pondered how tariffs could tackle those complicated projects in today’s highly globalized world.

Cyndy McCrossen, film liaison for the Albuquerque Film Office, had a similar question. She added that tariffs aren’t the solution to spurring more locally-made projects.

“You entice more people with a carrot than you do a stick,” McCrossen said. “He’s talking about all these wonderful packages that other countries provide. Well, we don’t even have a national film office. ... The burden of incentives is now on the states. Why doesn’t the federal government offer incentives?”

Some states offer incentives to productions as a means to ease costs — a mechanism that has boded well in recent years for New Mexico, which offers a film tax credit of up to 40% based on a variety of factors.

“New Mexico has a great incentive compared to California,” said Pipher, who also owns a studio in Burbank, California. “It’s also great, in my mind, compared to some of the other film hotspot states like Georgia.”

Georgia offers a base tax credit of 20%, but it’s one that you have to sell, Pipher said. Whereas New Mexico’s process is a lot simpler and more lucrative because “they’re just going to write you a check,” he said. The studio owner said New Mexico’s tax incentive is what drew him to the state.

New Mexico’s 25% base incentive compares “very favorably” with other states, Graham said.

The state can also offer additional credits based on other factors, like if a production utilizes a qualified production facility or films in rural parts of the state at least 60 miles outside of Albuquerque and Santa Fe.

“We compare favorably not only because of the money that they get back, but also because we have a world-class crew base and lots of folks that are at the top of their game that live and work here in New Mexico,” Graham said. “We’re really just focused on being ready and willing and able to produce here in New Mexico, and we’ll take that as it comes.”

It’s “too early to assess the full efficacy” of Trump’s tariffs said Gannon Murphy, an executive with Cinelease Studios.

“We welcome the spotlight as a catalyst for robust and productive dialogue,” Murphy said.