Mexico Launches 30 Percent Film Tax Incentive as Global Production War Heats Up

On a sunlit stage in Mexico City on Sunday, President Claudia Sheinbaum Pardo stood alongside one of the country's most famous cultural exports — Oscar-nominated actress Salma Hayek Pinault — to announce what amounts to a direct counterpunch in the escalating global battle over film production dollars. Mexico will now offer a 30 percent tax incentive for projects shot in the country, making it more attractive for runaway productions just as the Trump government is intensifying pressure on U.S. companies to shoot more films at home .

The incentive, coordinated with Mexico's Ministry of Finance and Public Credit, took effect immediately upon announcement. It amounts to up to 30 percent of the income tax corresponding to a project's expenditures incurred within the territory . The program will apply for live action or animated feature films and TV series episodes that spend a minimum of 40 million pesos ($2.3 million) in country; documentary feature films and series with a minimum expenditure of 20 million pesos ($1.2 million); and animation, visual effects, or post-production processes with a minimum expenditure of 5 million pesos ($290,000) . There is a maximum cap of 40 million pesos ($2.3M) per project or process . A key requirement is that projects must include at least 70 percent domestic suppliers .

The incentive will be for Mexican individuals and legal entities, for foreign individuals and entities with a permanent establishment in the country, and foreign individuals and entities who carry out production through a Mexican resident individual or legal entity . This broad eligibility structure is designed to attract international productions while channeling economic benefits through Mexican companies and workers.

Hayek Pinault, the Coatzacoalcos-born Eternals actress who started out in Mexican telenovelas before breaking out internationally in Robert Rodriguez's Mexico-set and shot neo-western Desperado, with highlights since including her Oscar-nominated performance as Mexican painter Frida Kahlo in Frida, lent personal weight to the announcement . She said she owed her career to the Mexican film community and called it a great honor to stand alongside them to announce this incredible new initiative . She added that with this support, there is no comparison — there is no country in the world with such ecological diversity and beauty, and no other country has what Mexico has .

President Sheinbaum said the goal of the program was to meet the level of the Mexican people and to match the extraordinary creativity that exists in the country, noting that Mexicans were a resilient people who have always fought for their independence, for their sovereignty, and for the defense of their cultural rights .

The Minister of Culture, Claudia Curiel de Icaza, explained that the incentive amounts to up to 30 percent of the income tax corresponding to the project's expenditures incurred within the territory . She said the aim was to attract high-value international productions while ensuring that national productions remain in Mexico, thereby strengthening the country's creative economy, cultural sovereignty, and the diversity of stories produced from Mexican territory . A cornerstone of the new plan also encompasses training, production, exhibition and preservation — signaling that the government views this as a comprehensive industrial strategy rather than a one-off incentive.

The timing is anything but coincidental. The move and Mexico's broader push to grow production infrastructure comes as the Trump government continues to threaten to levy tariffs of up to 100 percent on films produced outside the United States . Trump has repeatedly proposed such tariffs, arguing that foreign subsidies and tax incentives are hurting Hollywood. He has yet to clarify how such system could work, given that films are non-material goods, but the threats have had unsettling effects on both Hollywood and global production hubs . Many have suggested the U.S. instead implement its own federal tax incentives to bring production back home .

Critics of Trump's proposed tariff argue it would be practically unenforceable and economically counterproductive. Major Hollywood studios rely on global production networks not merely for cost savings but for access to diverse locations, specialized talent pools, and co-production financing structures that would be impossible to replicate domestically. The Motion Picture Association has been notably cautious in its public statements, declining to endorse the tariff while also avoiding direct confrontation with the White House. Some industry analysts have suggested that rather than punishing foreign production, the United States should implement its own federal production tax credit — something that currently exists only at the state level, with widely varying terms.

Mexico's move positions it squarely in the camp of countries choosing to compete rather than retreat. The country's film industry has been on an upward trajectory for years, buoyed by the global success of directors like Alfonso Cuarón, Guillermo del Toro, and Alejandro González Iñárritu, as well as a growing domestic market fed by streaming platforms. Netflix, Amazon, and other streamers have significantly expanded their Mexican-language production slates, and Mexico City has emerged as a major Latin American production hub with increasingly sophisticated studio infrastructure.

With 30 percent, Mexico enters the global incentive race at a competitive level, though below some of the most aggressive programs. New Mexico offers a 40 percent refundable tax credit, while the United Kingdom's film tax relief can reach 25.5 percent with additional uplift for visual effects. Canada's various provincial programs range from 25 to 37 percent. Colombia, another Latin American competitor, offers a 40 percent cash rebate for audiovisual services. Mexico's lower headline rate is partially offset by its geographical proximity to the United States, lower labor costs, and a deep bench of bilingual talent.

Not everyone is convinced the incentive will achieve its stated aims. Mexican independent filmmakers have expressed concern that the program's minimum expenditure thresholds effectively exclude the vast majority of domestic productions, which typically operate on far smaller budgets. The program appears designed primarily to attract international blockbusters and high-end television, potentially widening the gap between Mexico's commercial and art-house sectors. The domestic supplier rule could also prove difficult to enforce, particularly for visual effects and post-production work that is inherently global in nature.

There is also the geopolitical dimension. Mexico-U.S. relations remain fraught, with ongoing disputes over trade, immigration, and drug policy. Launching a production incentive while Trump is actively trying to force production back to American soil could be read as a provocation — or, alternatively, as a savvy bet that the tariff threat will never materialize and that productions looking for alternatives to increasingly expensive Canadian and British facilities will find Mexico's combination of incentives, proximity, and cultural richness irresistible.

The broader picture is one of a global production landscape in flux. Trump's tariff threats have introduced uncertainty into an industry that runs on multi-year planning cycles, and countries around the world are recalculating their positions. Some, like the UK, are doubling down on existing programs. Others, like Mexico, are launching new ones. The question now is whether the threat of American protectionism will actually reshape where movies are made — or whether it will simply accelerate the diversification of global production away from any single dominant market.

Hayek Pinault, who has navigated between Mexican and American filmmaking for three decades, closed with characteristic directness. Mexico has a long and distinguished cinematic legacy and a film industry that is truly world-class, home to some of the most talented and creative artists and technicians she has ever had the privilege of working with, she said . She thanked President Sheinbaum for having her and for letting her be a part of this historic moment, and concluded: Viva México .