U.S. President Donald Trump on Sunday announced 100% tariffs for all films produced in “foreign lands”, saying struggling Tinsel Town would be better served by “movies made in America”.

So-called “Aussiewood” has for years used generous tax breaks and other cash incentives to lure foreign filmmakers Down Under, producing a string of hits for major Hollywood studios.

Although little is known about how the tariffs might work, Australia’s top diplomat Wong said they risk ultimately proving a flop with filmgoers.

“Our message is we make great films together,” she told national broadcaster ABC.

“We have films, American films, which are filmed here in Australia. The collaboration is a good thing. So, let’s not get in the way of that.”

“Crocodile Dundee”, a 1986 comedy about an Australian bushman transplanted to New York City, helped put Australia’s fledgling film industry on the map in America.

Since then, some of Hollywood’s hottest directors have used Australia to film Marvel blockbusters, Mission Impossible instalments, and box office winners like Elvis.

The tariffs could also trouble neighbouring New Zealand, which famously lent its spectacular scenery to the beloved Lord of the Rings trilogy.

New Zealand Film Commission boss Annie Murray said they were still trying to untangle how the tariffs might work.

“We’re mindful, however, this is an evolving situation and it’s too early to speculate on what this could mean,” she told AFP.

The tariffs appear to target a business model favoured by American studios who obtain tax breaks to film in countries such as Britain, Canada, Ireland and Australia.

A recent survey of studio executives found that their top five favoured production locations were all outside the United States.

At the start of this year, Trump appointed veteran stars Sylvester Stallone, Mel Gibson and Jon Voight to bring Hollywood back “bigger, better and stronger than ever before”.