Trump tariff order on movies leaves film industry flummoxed

WASHINGTON – The entertainment industry reacted with a mixture of alarm and bafflement on May 5 after US President Donald Trump said he would

put a 100 per cent tariff

on all movies produced outside the US, but issued few details on just how such a levy would work.

Mr Trump’s May 4 announcement was the latest in his series of levies and threats on various global industries in an effort to boost industrial activity in the US.

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.

The White House said on May 5 that it had not made any final decisions on foreign film tariffs, but noted how Hollywood film production sharply declined from the previous year.

Mr Trump did not say whether the duties will apply to films on streaming platforms as well as theatrical releases, nor did he detail whether tariffs would be based on production costs or box office revenue.

It also was not clear whether productions split between the US and other countries – such as the James Bond or Mission: Impossible films – would be exempt in some fashion.

On May 5, Mr Trump told reporters he would meet 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,” PP Foresight analyst Paolo Pescatore said.

“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.”

Mr 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 May 4 that he wants more movies made in America.

The uncertainty sent shares of media companies down across the board on May 5, 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 per cent in afternoon trading. Disney, Warner Bros Discovery and Universal-owner Comcast were little changed after falling earlier.

Stocks of theatre operators such as Cinemark and Imax were down 2.1 per cent and 1.6 per cent, respectively, shedding some of their earlier losses. Imax declined to comment, while others did not respond to requests for comment.

‘Risk of retaliatory tariffs’

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 Britain, Canada and Australia to take advantage of generous tax credits and lower labour costs.

Most of the 2025 Oscar best picture nominees were filmed outside the US, 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 US.

“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,” Rosenblatt Securities analyst Barton Crockett said.

Hollywood is already in the crosshairs of China, which vowed in April to

curb US 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 Centre for Strategic and International Studies – said retaliation against Mr 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.

Mr 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.

Mr Matthew Stillman – chief executive of Prague-based Stillking Films, one of the biggest producers of US-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 three to five years,” he said. REUTERS