The news: President Donald Trump has announced plans to impose a 100% tariff on movies produced overseas and brought to the United States as the ongoing tariff war escalates.

Per Trump’s post on Truth Social, the president is authorizing the US Department of Commerce and Trade Representative to impose levies on movies made in foreign countries in response to America’s film industry “dying a very fast death,” claiming foreign-made movies pose “a national security threat.”

Several Hollywood studio stocks fell following the announcement, including shares of Disney, Paramount, Netflix, Warner Bros. Discovery, and Comcast, per CNBC.

Zooming in: While it’s unclear what tariffs on foreign-produced films will look like, a likely approach would target financial incentives provided by non-US governments, rather than consumer-facing costs like streaming fees or theater admissions.

Still, the impact of these tariffs will be substantial.

• The implementation of 100% tariffs on non-US produced films would hit the American film industry hard, as domestic production expenses would increase without the benefit of international tax incentives—potentially eliminating mid-budget productions entirely.
• The most immediate impact could be a rise in production costs for US studios, as they will likely have to pay more to shoot films abroad. These costs could be passed on to consumers, making companies like Netflix potentially vulnerable to tariff pressures.
• The tariffs would likely cause a significant loss of revenues for US studios and streaming services. This could lead to a decline in the overall market for US films, as studios become less willing to invest in new projects.

Our take: In a film industry already struggling to match pre-pandemic box office revenues, Trump’s movie tariffs could devastate America’s own industry rather than help it, eliminating foreign tax advantages and increasing US filming costs.

• The modern film industry is largely an interconnected global network. Steep tariffs could fragment established production pipelines and collaborative relationships, with a particular impact on productions with moderate budgets that commonly rely on international financing and tax breaks.
• Retaliatory tariffs are likely, which could make it more difficult for US studios to distribute films internationally.
• US audiences could see limited access to international perspectives in film, while domestic productions could become more homogenized from reduced competition.