Every day, it seems we wake up to news from the US about new tariffs being introduced by President Trump. (Or the Orange, as he’s been named by my son. Which I like because it reminds me of a particular operatic citrus fruit that readers of a certain age will remember from Sesame Street. You can taste it here if you dare).
But back to US tariffs. It’s a confusing time as new measures are announced, analysed and sometimes walked back. Who knows how it will all shake down in the long term. I However, I thought it might be timely to present some ideas about how increased US tariffs might impact Australia’s creative industries. I’ve got five that come to mind.
Five potential impacts of US tariffs on Australia’s creative industries:
- Online sales to the US could become more expensive for consumers. Some Australian companies selling to the US via China have already experienced this, with their customers being sent unexpected duties to pay on online purchases (such as for fashion). The law that excluded customs duties being paid on online purchases under $800 was briefly scrapped and has (for now) been reapplied. However, the principle is that if extra duties are due on online purchases, this could catch Australian companies with Chinese supply and distribution chains. And potentially others if the rule is applied to Australian companies.
- There could be a fall in the value of the Australian dollar if a protracted trade war with China kicks off due to our close trading relationship. This could have both positive and negative impacts on the creative industries. Australia tends to become an attractive location for international film shoots when the dollar is low, but the cost of touring home-grown music and theatre acts internationally goes up. Digital and software exports might get a boost from low exchange rates, but costs will rise for anyone visiting or doing business with the US.
- Tariffs on imported goods push prices up for consumers, hence the many predictions that inflation will rise in the US during 2025. So again, higher costs for anyone visiting or doing business with the US. Another factor is the cost of borrowing capital could rise, as Australia’s inflation tends to follow North America’s. The greater the inflation, the greater the pressure on the RBA to raise interest rates. But on the flip side, an increase in interest rates in Australia could attract more foreign cash and potentially improve the exchange rate against the US dollar
- The US film and TV industry is struggling at the moment and was even before the impact of the recent LA wildfires. Many people are thinking about the impact the Orange 2.0 is going to have on the industry, including the difficulty in raising funding, bans on US-made content and even restrictions on freedom of artistic expression (a hot topic in Australia at the moment). This is all speculation… so allow me to add to it. We’ve seen the Orange’s protectionist stance on the steel and aluminium industries, and his ongoing interest in Hollywood was flagged by his appointment of some surprising “ambassadors”. I can imagine a set of protectionist policies being employed to keep US production activity based in the US, which would mean fewer globetrotting movies and more difficulty accessing US talent and crew. Could we even see a “tariff” on the use of talent and crew from foreign actors in Hollywood? We’ll see!
- Expect the US philanthropy market to tighten in the wake of cuts to arts funding. The National Endowment for the Arts (NEA) has already tightened its funding criteria to prioritise projects celebrating the 250th anniversary of the Declaration of Independence, moving away from diversity, equity, and inclusion (DEI) initiatives. This doesn’t mean that new arts projects outside these strictures will disappear, but they must be funded from elsewhere. Two impacts for our creative industries here: fewer US arts projects travelling here, and thus, theatres and galleries will look for different international partners to produce work with.
Meanwhile, on the other side of the Atlantic, some better news. In a time when it’s cutting costs nearly everywhere else, the UK government recently announced a £60 million funding boost for the creative industries, as part of its broader Industrial Strategy to drive economic growth. Culture Secretary Lisa Nandy unveiled this package, during a major economic growth summit in Gateshead. The £60 million investment includes:
- £40 million for start-up video game studios, British music and film exports, and creative businesses outside London,
- £16.3 million for the Create Growth Programme (a business support program focused on helping companies attract investment),
- £2.5 million for the Supporting Grassroots Music Fund,
- £5.5 million for the UK Games Fund,
- £1.6 million for the Music Export Growth Scheme, and
- £7 million for the UK Global Screen Fund.
Nandy emphasised that this funding will “support creative and cultural organisations across the UK to turbocharge growth by transforming local venues, creating jobs, supporting businesses and spreading opportunity across the country”.
In Australian dollars, that’s a $120 million investment (just under half of Creative Australia’s annual budget), and it’s got a strong emphasis on music, film and games. A case of the UK government picking winners? We’ll wait and see if it inspires any similar initiatives as we get closer to a Federal election.
And speaking of which… the “Save Our Arts” campaign has recently launched in Australia, ahead of an impending federal election. This coalition is campaigning for Australian arts and cultural sovereignty, aiming to put the arts on the agenda during the upcoming election. High-profile supporters include filmmaker Sue Maslin, author Tim Winton and Powderfinger’s Darren Middleton. The campaign emphasises the daily engagement of Australians with various elements of art, highlighting its importance in everyday life, and argues for a range of interventions including a local content levy on streamers, a performing arts production offset, vouchers for kids to buy Australian-authored books and funding boosts for a range of creative activities.
They stopped short of recommending blanket tariffs on all imported creative products. Now, that’s an Orange idea if I have ever heard one.