Stocks for major Hollywood studios and streaming platforms experienced declines on Monday morning following President Trump’s announcement of a plan to impose 100% tariffs on films produced abroad.
In early trading, Netflix saw a drop of around 4%, Disney declined by over 2%, and Warner Bros Discovery fell more than 3%. Paramount also decreased by over 2%, while Universal’s parent company, Comcast, experienced a drop of about 1%.
The decline coincided with reactions from leading Hollywood figures regarding Trump’s tariff stance on international films.
He remarked that the American film industry is facing significant challenges and criticized other nations for offering various incentives that draw filmmakers away from the U.S. He described the situation as a joint effort by other countries threatening national security and labeled it as propaganda.
As a result, he instructed the Department of Commerce and the U.S. trade representative to initiate processes for imposing the 100% tariffs on films produced outside the U.S.
It’s still uncertain how these film tariffs may affect intellectual property, and there could be legal pushback from various sectors concerning free speech issues.
There are also questions about which films will be targeted and how the tariffs will be enforced.
Many studios operate production facilities worldwide and have a history of filming internationally for reasons like tax incentives and ideal locations, reducing the need for elaborate sets.
Alicia Reese from Wedbush communicated to investors that large studios, distributors, and independent creators face significant challenges as they may need to advocate with the Trump administration to establish fair regulations for films requiring location shoots abroad.
She estimated that approximately 75% of Netflix’s offerings are created outside the U.S., with foreign language films and shows comprising a large portion of streaming content. Moreover, much of Netflix’s material is produced by third-party studios, and the company has little disclosure about the filming locations.
When Trump first imposed a 25% tariff related to Canada, a key filming destination for Hollywood, industry analysts stated it would likely have minimal impact on production.
Overall, the topic of tariffs on intellectual property presents a new and complex challenge for the film industry.
