(LOOTPRESS) – President Donald Trump announced Monday that he intends to impose a 100% tariff on movies produced outside the United States, a move that would mark the first time his administration has applied tariffs to a service rather than a physical good.
Trump made the declaration in a Truth Social post but did not outline when the measure would take effect or how it would be implemented. He first floated the idea in May, arguing that foreign tax incentives have lured filmmakers overseas. On Monday, he pointed to California as “particularly hard hit” by the trend.
Industry insiders reacted with skepticism when Trump initially previewed the plan earlier this year. “On first blush, it’s shocking and would represent a virtually complete halt of production,” one Hollywood executive told CNN in May. “But in reality, he has no jurisdiction to do this and it’s too complex to enforce.”
While California and several U.S. cities have introduced tax breaks to keep productions domestic, studios often choose to film abroad because of cheaper labor and generous rebates. “It’s cheaper for Hollywood studios to pay for everyone to get on planes, pay for hotels, because the cost of labor, lack of rebates and the ability to make things overseas is infinitely cheaper,” Jay Sures, vice chairman of United Talent Agency, said at the time.
Markets appeared to react to Trump’s comments. Shares of Netflix (NFLX) opened down about 1% Monday, while AMC (AMC) and Disney (DIS) saw early gains.
The threat comes amid a struggling U.S. box office. Domestic ticket sales peaked at nearly $12 billion in 2018 before plunging to just over $2 billion during the pandemic in 2020. Although theaters have since reopened, the number of new releases remains about half of 2019 levels, and the domestic box office has yet to climb back above $9 billion.
Warner Bros. Discovery, CNN’s parent company, is the first studio this year to surpass $4 billion in global box office revenue.
The administration is also preparing a broader tariff package. Starting Wednesday, the U.S. will impose a 100% tariff on branded pharmaceuticals, with some exceptions; a 25% tariff on heavy trucks; a 50% tariff on kitchen cabinets and vanities; and a 30% tariff on upholstered furniture. Trump separately said he plans to add a “substantial” tariff on all imported furniture.
