Trump vows to impose tariff on all movies made outside US
President Donald Trump announced in a Truth Social post on Monday that he will be imposing a 100% tariff "on any and all movies that are made outside the United States."
Trump did not specify when or how the tariff might be implemented.
If Trump proceeds with this threat, it would be the first time he has essentially imposed a tariff on a service rather than a product.
The president initially threatened a 100% tariff on foreign-produced films in May, arguing that other countries offer tax incentives that have attracted filmmakers abroad. In his post on Monday, he singled out California, saying the state "has been particularly hard hit!"
Meanwhile, the state has proposed and implemented numerous tax incentives, as have other American cities.
Hollywood was completely caught off guard when Trump first hinted at the tariff in May. "At first glance, it’s shocking and would mean a virtually complete halt of production," an industry insider told CNN at the time. "But in reality, he does not have the authority to do this, and it’s too complex to enforce."
American actors and directors generally prefer to work close to home. But "the fact is, it’s cheaper for Hollywood studios to pay for everyone to fly, cover hotel expenses, because the cost of labor, lack of rebates, and the ability to produce things overseas is significantly cheaper," Jay Sures, vice chairman of United Talent Agency, told CNN in May.
Shares of Netflix (NFLX) opened 1% lower on Monday morning following Trump’s post, while other movie-related companies, including AMC (AMC) and The Walt Disney Company (DIS), opened higher.
Movie ticket sales have decreased in the United States as the number of major releases hitting theaters has dropped since the pandemic—and consumers have shifted their viewing habits to streaming platforms for home viewing.
The US box office gross peaked at just under $12 billion in 2018 before plummeting to just over $2 billion in 2020, when many theaters were closed due to Covid. Although theaters have rebounded, the number of releases is about half of what it was in 2019. The total domestic box office gross hasn’t surpassed $9 billion since.
Warner Bros. Discovery, CNN’s parent company, has generated $4 billion in global box office sales so far this year, becoming the first studio to reach that level.
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