Yesterday, President Trump said he would talk directly with Hollywood officials to see if they were “happy” with his proposal to put a tariff on foreign-made films entering the US. In the meantime, industry players shared their reactions.
What’s happening
On Sunday, Trump announced the tariff in a Truth Social post lamenting the dying US movie industry and saying foreign countries’ tax incentives for film companies amounted to a national security threat. In response, big entertainment stocks like Netflix, Disney, Warner Bros. Discovery, Paramount, and Comcast saw sharp declines yesterday before stabilizing by the end of the trading session.
Why? Investors thought Trump’s plan spelled trouble for the film and TV industry. Netflix, for instance, produces an estimated ~75% of its total content internationally.
The president has a point
From 2021 to 2024, film and TV production spending in the US dropped 28%, according to research firm ProdPro. Tax incentives and lower labor costs have attracted the industry to Canada and overseas to countries like Australia and parts of the UK:
- Last year, about two-thirds of the money the UK film industry earned came from US studios and streaming platforms.
- Los Angeles just wrapped its worst year in three decades for on-location filming in the city aside from 2020.
There are still a lot of questions…industry experts and analysts say a blanket tariff, as opposed to some kind of federal film incentive, which unions have advocated for, is confusing and could end up harming the industry. For starters, tariffs are usually reserved for physical goods and enforced by border agents. You could put a tariff on DVDs, but it’s unclear what part of the production would get the levy. Some movies are filmed partly in the US and partly abroad, or a film could shoot in the US and then be edited in the UK.—MM