Using Tariffs to Discourage Movie Production Outside US

Following the lead of American manufacturers, American moviemakers are moving their operations abroad in search of cheaper labor. Canada, especially, has become a hotspot for filming, offering attractive tax incentives and a cheap dollar. United States film crews – and the governor of California – are increasingly alarmed at the growing trend, however. Fed up, members of the American film industry are demanding that the U.S. impose tariffs on movies made in Canada, and Governor Gray Davis wants to create tax credits to bring American movies back to Hollywood. At stake is the issue of whether movies are products that can be taxed, as Americans claim, or services, as Canadians would argue. – YaleGlobal