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Economy

Trump’s 100% Tariff on Foreign Movies: What’s at Stake for Hollywood and Investors?

Trump proposed 100% tariff on foreign movies, impacting Netflix negatively, but boosting some domestic film stocks.

byEditorial Staff

September 29, 2025, 12:59 PM

Executive Summary

President Donald Trump announced his intention to impose a 100% tariff on all movies made outside the United States, targeting the services sector.

Trump’s rationale is to counter foreign tax incentives that draw filmmakers abroad, despite U.S. states like California also offering production incentives.

The proposal, initially floated in May, has generated shock within the film industry and led to mixed market reactions, with Netflix shares down and AMC and Disney shares up.

The Story So Far

President Trump’s proposal for a 100% tariff on foreign-made movies stems from his belief that international tax incentives unfairly lure film productions away from the United States, impacting the domestic film industry. This protectionist stance, which Trump first floated in May, is aimed at counteracting the economic reality that studios often find it more cost-effective to film abroad due to lower labor costs and better rebates, despite domestic efforts to attract productions.

Why This Matters

President Trump’s proposed 100% tariff on foreign-made movies marks a significant expansion of trade protectionism into the services sector, moving beyond traditional goods. This policy, if enacted, could profoundly disrupt the global film industry by dramatically increasing production costs for studios that often film overseas for economic reasons, potentially leading to higher prices for consumers and a shift in content availability. The lack of specific implementation details has already generated market uncertainty, with varied stock reactions reflecting investor concern over its feasibility and broader economic ramifications.

Who Thinks What?

Donald Trump argues that a 100% tariff on foreign-made movies is necessary to counteract other countries’ tax incentives that draw filmmakers abroad, thereby supporting the domestic film industry.

Industry insiders and executives, such as Jay Sures, view the potential tariff as “shocking” and capable of halting production, questioning its jurisdiction and enforcement, and noting that studios often film overseas due to lower labor costs and better rebates.

President Donald Trump announced on Monday his intention to impose a 100% tariff on “any and all movies that are made outside of the United States.” The announcement, made via a Truth Social post, did not specify a timeline or method for enacting the measure, which would represent a significant shift by targeting a service rather than a raw good.

Policy Details and Rationale

Trump’s rationale for the proposed tariff centers on the argument that other countries offer tax incentives that draw filmmakers abroad, negatively impacting the domestic film industry, particularly in states like California. This is not the first time President Trump has floated such a proposal; he initially threatened a 100% tariff on foreign-produced movies in May.

Despite Trump’s claims regarding California, the state itself has implemented numerous tax incentives to attract and retain film productions, a practice also common in other American cities.

Industry Reaction and Market Impact

The initial threat in May caught Hollywood by surprise. An industry insider, speaking to CNN at the time, described the potential tariff as “shocking” and capable of halting production, though they questioned the President’s jurisdiction and the complexity of enforcement. Jay Sures, vice chairman of United Talent Agency, noted in May that studios often find it more cost-effective to film overseas due to lower labor costs and better rebates.

Following Trump’s latest post on Monday morning, shares of Netflix (NFLX) opened down 1%. Conversely, other companies with ties to the movie industry, including AMC (AMC) and The Walt Disney Company (DIS), saw their shares open higher.

Looking Ahead

The proposed 100% tariff on foreign-made movies signals a potential expansion of trade protectionism into the services sector. The lack of specific implementation details leaves the industry and markets awaiting further clarification on how such a policy could be enacted and its broader economic ramifications.