President Trump’s recent proposal to impose tariffs on films made outside the U.S. has sparked confusion and concern within the entertainment industry. Stated on his Truth Social account, Trump’s plan aims to combat what he perceives as harmful foreign incentives affecting American cinema, declaring, “WE WANT MOVIES MADE IN AMERICA, AGAIN.” However, by noon on Monday, White House officials clarified that no final decisions had been made and that they were “exploring all options.”
Morgan Stanley analysts criticized the proposal as “ill-defined,” stating that imposing 100% duties could lead to fewer films, increased production costs, and lower industry earnings. They highlighted the complexities of film production, which often occurs across multiple countries, leaving questions regarding the tariff’s specific applications unanswered. This comes at a challenging time for Hollywood, facing social media competition, changing viewer habits, and impacts from the writers’ strike, which resulted in a declining box office of $8.75 billion—down 3% from the previous year.
Although Hollywood has increasingly shifted production overseas, experts note that the U.S. entertainment sector maintains a trade surplus in the industry due to international demand for American films. Shares of major studios like Netflix and Warner Bros. fell following the announcement.
Moreover, Trump has appointed high-profile actors, including Mel Gibson and Sylvester Stallone, as ambassadors to revitalize lost business, who have historically supported him. Some analysts from Wedbush suggested that studios could adapt by bringing some production aspects back to the U.S. to mitigate tariff impacts, predicting that the discussion around tariffs may eventually fade as foreign reactions and congressional authority come into play.
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