Mexico unveils 30% Hollywood tax credit to counter Trump administration pressure

MEXICO CITY — President Claudia Sheinbaum Pardo and actress Salma Hayek Pinault announced a new 30% tax incentive program Tuesday aimed at attracting international film productions to Mexico.

The move seeks to bolster the competitiveness of Mexico’s domestic film industry as the Trump administration threatens tariffs of up to 100% on movies produced outside the United States.

To qualify for the tax break, feature films and television series must spend a minimum of 40 million pesos ($2.3 million) within the country. The threshold for documentaries is set at 20 million pesos ($1.2 million), while post-production and visual effects projects must spend at least 5 million pesos ($290,000).

Sheinbaum said the program is designed to showcase the "extraordinary creativity" of the Mexican people. Hayek added that the incentives would foster national pride by supporting the telling of authentic stories.

Mexico City has launched a direct economic counter-offensive, positioning itself as a strategic sanctuary for Hollywood studios caught between Donald Trump’s protectionist rhetoric and the tightening margins of global film production. While the U.S. President-elect leverages the threat of tariffs—a tool whose application to intangible assets like motion pictures remains legally and logistically murky—to repatriate production, Mexico is deploying a concrete "carrot": a substantial 30% reduction in production costs.

This move is less a bilateral skirmish than an escalation in the global arms race for high-value media investment. By formalizing this incentive package, Mexico is challenging established production hubs like Canada, the United Kingdom, and Hungary, which have long used aggressive tax credits to court billion-dollar franchises. The new framework consolidates Mexico’s competitive standing, leveraging its geographic proximity to Los Angeles and the diverse location portfolio championed by industry figures like Salma Hayek.

For major studios, the decision-making process has evolved into a high-stakes risk assessment. On one side of the ledger sits a guaranteed multi-million dollar fiscal saving; on the other is the volatile political risk emanating from Washington. While Trump’s tariff threats have yet to be codified into policy, they have successfully injected a level of institutional uncertainty that competitors like Mexico are now weaponizing to their advantage. Furthermore, the involvement of a high-profile envoy like Hayek reflects a sophisticated communication strategy, reframing a technical tax policy as a narrative of national pride and cultural soft power to capture the international spotlight.

While this policy does not directly impact the small businesses that anchor our communities—from the nail salon industry to the phở restaurants of Little Saigon—it serves as a significant indicator for Vietnamese-American filmmakers and production professionals. For those working within the U.S. entertainment industry, this reflects an increasingly fragmented and competitive global landscape. The growth of lower-cost production opportunities outside of California and the U.S. offers a double-edged sword, providing new creative prospects while presenting fresh challenges for those in the field.