100% tariff shock on all foreign-made movies — 'California has been hard hit'

President Donald Trump announced on Monday via a Truth Social post that he intends to slap a 100% tariff on "any and all movies that are made outside of the United States".

However, he did not provide details on when or how this tariff might be implemented.

If this policy is carried out, it would be the first time Trump has effectively placed a tariff on a service rather than a physical good.

Trump first hinted at this tariff in May, criticising foreign countries for offering tax incentives that attract filmmakers away from the US.

In his latest post, he specifically targeted California, stating the state “has been particularly hard hit!”

Tax incentives

Despite Trump's claim, California and various US cities have already established many tax incentives to support film production.

The announcement surprised Hollywood, with an industry insider telling CNN at the time: “On first blush, it’s shocking and would represent a virtually complete halt of production. But in reality, he has no jurisdiction to do this and it’s too complex to enforce.”

Enforcement

Jay Sures, vice chairman of United Talent Agency, explained the economics behind filming abroad: “The fact is, 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.”

After the announcement, Netflix shares fell 1% Monday morning, while other entertainment companies such as AMC and The Walt Disney Company saw their stock price rise.

The US movie industry has faced challenges, with ticket sales down and fewer major releases since the pandemic pushed viewers toward streaming platforms.

Box office revenue

The US box office peaked near $12 billion in 2018 but plunged to just over $2 billion in 2020 during widespread theatre closures.

Although theatres have recovered somewhat, the number of releases remains about half that of 2019, and domestic box office revenue has not surpassed $9 billion since.

Warner Bros. Discovery, CNN's parent company, has generated $4 billion in global box office sales this year, becoming the first studio to reach that milestone.

Beyond movies, Trump’s administration is preparing multiple new tariffs.

Starting Wednesday, a 100% tariff will apply to branded drugs (with some exceptions), along with a 25% tariff on heavy trucks, a 50% tariff on kitchen cabinets and vanities, and a 30% tariff on upholstered furniture.

Trump also declared plans to impose a “substantial” tariff on all imported furniture in a separate Monday social media post.