A few of Hollywood’s greatest leisure firms noticed their inventory costs dip Monday — hours after President Trump floated a surprising 100% tariff on all motion pictures produced exterior the US.
In a late-night submit on Reality Social, Trump mentioned he had licensed the Commerce Division and US Commerce Consultant to start instituting the tariffs, framing the measure as a nationwide safety concern, however providing few particulars on simply how such a levy would work.
“The Movie Industry in America is DYING a very fast death,” he wrote Sunday.
“It is, in addition to everything else, messaging and propaganda!”
Commerce Secretary Howard Lutnick, responding to Trump’s directive, posted on X: “We’re on it.”
He supplied no additional particulars.
On Monday, the White Home mentioned it has not but made any last choices on overseas movie tariffs.
“Although no final decisions on foreign film tariffs have been made, the Administration is exploring all options to deliver on President Trump’s directive to safeguard our country’s national and economic security while Making Hollywood Great Again,” White Home spokesman Kush Desai advised The Put up.
Shares of Netflix, Disney, Warner Bros. Discovery and Paramount had every dropped greater than 2% after the opening bell earlier than paring again some losses by the afternoon.
Trade executives mentioned they had been caught without warning by Trump’s newest tariff risk.
“Nobody saw this coming,” one senior studio government advised the Wall Road Journal.
“There was no heads-up, no draft language, nothing. Just a Truth Social post and chaos.”
The proposed tariff targets movies made exterior the US by American studios — a typical follow pushed by beneficiant overseas tax incentives and manufacturing infrastructure in nations just like the UK and Canada.
Trump took purpose at these insurance policies in his submit, labeling them “a concerted effort by other Nations and, therefore, a National Security threat.”
However specialists warn that making use of tariffs to motion pictures poses important logistical and authorized hurdles.
In contrast to manufactured items, movies aren’t shipped throughout borders in a approach that permits for conventional customs enforcement.
Figuring out tips on how to “value” a film for tariff functions and defining what qualifies as an “imported” movie would require a novel — and sure controversial — framework.
“This isn’t like taxing steel,” one worldwide commerce legal professional accustomed to leisure legislation advised the Journal.
“You’re talking about intangible products, shared intellectual property, and global distribution models. It’s not clear how this would even work.”
A spokesperson for California Gov. Gavin Newsom, who has proposed boosting tax incentives to entice Hollywood studios to find their manufacturing units within the Golden State, advised Deadline that the president has “no authority” to impose tariffs on movies.
The announcement arrives at a fragile second for Hollywood. Home movie manufacturing has struggled to get well post-pandemic, and studios have more and more relied on overseas areas to chop prices.
Based on trade information agency ProdPro, US movie and tv manufacturing with budgets over $40 million dropped 26% over the previous two years. In distinction, spending in Canada and the UK rose.
London has emerged as a premier vacation spot for American blockbusters, providing sturdy tax breaks and top-tier amenities.
Two upcoming Marvel Studios “Avengers” movies are being shot there, whereas main franchises like “Mission: Impossible — The Final Reckoning” and “Jurassic World Rebirth” had been additionally largely filmed overseas.
Ought to different nations retaliate with their very own levies on American-made content material, the monetary blow to studios might be extreme.
Huge-budget movies now derive the majority of their field workplace income from worldwide markets.
The US movie trade posted a $15.3 billion commerce surplus in 2023, in line with the Movement Image Affiliation, with optimistic balances in each main abroad market.
“This could backfire spectacularly,” mentioned a veteran producer.
“If we’re hit with reciprocal tariffs, the economics of international film distribution collapse overnight.”
Regardless of the backlash, Trump seems dedicated to his aggressive stance.
In January, he appointed actors Jon Voight, Mel Gibson, and Sylvester Stallone as his “special ambassadors” to Hollywood, claiming they might assist reverse the trade’s shift overseas.
“These three very talented people will be my eyes and ears, and I will get done what they suggest,” Trump mentioned on the time.
