President Donald Trump walks across the South Lawn of the White House on September 26. Photo by Julia Demaree Nikhinson/AP.
As informed by CNN
President Donald Trump stated in a Truth Social post on Monday that he will impose a 100% tariff on any films produced outside the United States. He did not specify when exactly this could take effect or how the mechanism would be implemented.
If his statement comes to fruition, it would be the first instance where a tariff targets a service rather than a good in global trade practice.
Initially, he threatened a 100% tariff on foreign-produced films in May, arguing that other countries provide tax incentives that attract filmmakers abroad. In the Monday post he cited California, noting that the state had “suffered a particular blow”.
Meanwhile, California and other regions of the United States continue to implement and apply various tax incentives to support the film industry, seeking ways to attract productions to their locations.
At first glance this is shocking and implies an almost complete halt to production.
Industry reaction and market consequences
Following the post, Netflix’s shares opened about 1% lower on Monday morning, while other companies in the film industry, including AMC and The Walt Disney Company, opened higher in trading.
Box office totals in the United States remain below long-term trends: the number of big releases in theaters has declined since the pandemic, and audiences are increasingly turning to streaming platforms at home.
The thing is that Hollywood studios find it more cost-effective to cover travel for all workers and hotel stays, because the cost of labor, lack of returns, and the ability to shoot abroad are significantly cheaper.
This year, Warner Bros. Discovery, the parent company of CNN, logged about $4 billion in global box office grosses, becoming the first studio to reach that level.
In addition to films, the administration is also considering imposing other tariffs: 100% on branded medicines with certain exemptions; 25% on heavy trucks; 50% on kitchen cabinets and bathtubs; 30% on soft furniture.
In a separate post on social media on Monday, Trump stated his intention to impose a “significant” tariff on all imported furniture into the United States.
Economists and industry analysts say such steps could alter supply chains, raise production costs, and affect the releases of future projects. If import tariffs do come into effect, a corresponding response from global studios is expected, as well as possible changes in the free flow of investment into U.S. and international filmmaking.
