Potential U.S. film tariffs may be just smoke, but how this concern will impact the upcoming Cannes Film Market?

Potential U.S. Film tariffs may be smoke, but there is an unanswered question in the air: How will this menace affect the upcoming Cannes film market?

One of the most important film markets in the world, Marché du Film, takes place during the Cannes Film Festival. The event is a key moment for dozens of sales agents handling titles in different selections at the festival, as well as films or projects in production or already completed.

The situation represents a significant headache for some, as they do not know what kind of tariff will be imposed or what economic consequences it will have for American distributors and producers.

If the tariff is applied to any type of international product without exceptions, it could negatively impact potential sales, particularly for key titles in the official category, which are likely some of the protagonists of the Award Season. For example, last year, films like The Substance or Emilia Pérez, despite their North American casts, were not U.S. productions and were acquired by distribution companies that are also platforms (MUBI and Netflix).

At a time when audiovisual production is as decentralized as it is today, this kind of tariff is hard to imagine for many, especially within the U.S. landscape, which, unlike any other country, barely has any federal regulation. This points to a critical point in this conversation: tariffs over "what"?

It's important to understand that tariffs generally apply to tangible goods, and film and entertainment (especially nowadays) are intangible goods. For this reason, tariffs in the U.S. would require opening the conversation about how to define films, series, and other media and, from there, structure a regulation to be able to apply a potential tariff.

Because of this, tariffs could open some interesting avenues and consequences, such as placing the film industry within the realm of public regulation, something that until now has been very rare (if not completely absent) in the U.S. This could lead to other consequences, such as co-production or trade agreements with other markets.

However, these logistical and political consequences may not be in the head of the team developing tariffs, but they need to be as it's pointing to a totally different industry – which, by the way, is probably one of the most profitable and prominent exports in the country, not only economically but culturally. We all understand that the ultimate goal is to bring technical and physical jobs back to the States.

Finally, it's important to note that California will have elections next year. This issue could be used as a political tool to boost the Republican image in a traditionally Democratic state, though it has also had moments of Republican leadership. Will Sly become the new face of the party in California? Who knows.

Let's see how this situation unfolds and how other international markets can adapt or negotiate around it.