WASHINGTON--The entertainment industry reacted with a mixture of alarm and bafflement on Monday after President Donald Trump said he would put a 100% tariff on all movies produced outside the U.S., but issued few details on just how such a levy would work.
Trump's Sunday announcement was the latest in his series of levies and threats on various global industries in an effort to boost industrial activity in the United States.But his trade policy, a combination of tariffs, rollbacks and investigations that could lead to more import taxes, has sapped consumer and business confidence due to their confusing implementation and left many businesses in limbo.
Tariffs on movies might prove more difficult to implement than even the highly integrated North American automobile industry.It is unclear how tariffs on the film industry would work. Trump did not say whether he envisaged applying tariffs to streaming platforms as well as theatrical releases, or whether tariffs would be based on production costs or box office revenue. It also was not clear whether productions split between the United States and other countries - such as the James Bond or Mission: Impossible films - would be exempt in some fashion.
On Monday, the president told reporters he would meet with industry officials first to make sure they liked the idea. The White House said it had not made any final decisions, but noted that Hollywood film production had sharply declined from the previous year.
"There is too much uncertainty, and this latest move raises more questions than answers," said PP Foresight analyst Paolo Pescatore. "It doesn't feel like something that will happen in the short term as everyone will be grappling to understand the whole process. Inevitably costs will be passed on to consumers."
Trump in January appointed Hollywood veterans Jon Voight, Sylvester Stallone and Mel Gibson to bring the industry back "bigger, better and stronger than ever before," and said on Sunday he wants more movies made in America. The uncertainty sent shares of media companies down across the board on Monday, as it raised fears that such a move would sharply raise costs for Hollywood studios and roil the global entertainment industry.
The tariffs, if implemented, could particularly hurt Netflix as the streaming pioneer relies on global production to produce content for international audiences. Its shares were down about 1.5% in afternoon trading.
Disney, Warner Bros Discovery and Universal-owner Comcast were little changed after falling earlier. Stocks of theater operators such as Cinemark and IMAX were down 2.1% and 1.6%, respectively, shedding some of their earlier losses. IMAX declined to comment, while others did not respond to requests for comment.
Hollywood has been pressing for tax incentives to boost output in Los Angeles, the movie industry's historic home as the glitzy hub of cinema. Studios over the years have shifted production to locations such as the UK, Canada and Australia to take advantage of generous tax credits and lower labour costs. Most of this year's Oscar best picture nominees were filmed outside the U.S., and a survey among studio executives over their preferred production locations for 2025 to 2026 by ProdPro showed that the top five choices were all elsewhere.
Still, tariffs would put further pressure on an industry already reeling from cord-cutting and rising labour costs after the 2023 Hollywood strikes secured higher pay and broader benefits for writers and actors, and it is unclear whether it would accomplish the objective of boosting film production in the U.S. "Raising the cost to produce movies could lead studios to make less content. There's also a risk of retaliatory tariffs against American content overseas," said Rosenblatt Securities analyst Barton Crockett.
Hollywood is already in the crosshairs of China, which vowed last month to curb U.S. movie imports in retaliation for the latest broader tariffs. But analysts said the hit may be limited as box office returns from China have been declining.
Still, former senior Commerce official William Reinsch, a senior fellow with the Center for Strategic and International Studies, said retaliation against Trump's film tariffs would be devastating."The retaliation will kill our industry. We have a lot more to lose than to gain," he said, adding it would be difficult to make a national security or national emergency case for movies.
Analysts said enforcement would be difficult, as major media conglomerates could restructure operations to skirt the duties, producing content through foreign subsidiaries or licensing content across borders.
Trump's threat sparked concern across the global film industry. Leaders in Australia and New Zealand, key locations for Marvel movies and "The Lord of the Rings," said they would defend local film industries.
British media union Bectu urged the government to protect the country's "vital" film sector, warning tens of thousands of freelance jobs were on the line.
Matthew Stillman, CEO of Prague-based Stillking Films, one of the biggest producers of U.S.-financed international content in Central and Eastern Europe, said the tariff threat risked derailing global production pipelines. "The creation of business and market instability will also have an impact on any medium-term investment strategies as people will be uncertain about what the situation will be in 3 to 5 years," he said.
