Trump's potential film tariffs have already hit American movie companies

Recently, US President Donald Trump announced on his Truth Social platform that in order to save the American film industry, he proposed imposing a 100% tariff on all films produced outside the US. Despite the fact that this was only a statement, it has already affected the activities of American film studios, reports Variety.

Trump's statement caused shares of many of Hollywood's biggest companies to fall. Despite small corrections by the end of the day, Lionsgate Studios shares fell 4.1%, Warner Bros. Discovery - 2%, Netflix - 1.9%, and Paramount - 1.6%.

At the same time, White House spokesman Kush Desai noted that final decisions on tariffs on foreign films have not yet been made, which has caused the market to recover slightly.

"Although no final decisions on foreign film tariffs have been made, the Administration is exploring all options to deliver on President Trump’s directive to safeguard our country’s national and economic security while Making Hollywood Great Again," Desai said.

Donald Trump began imposing tariffs on exports from China and other countries in April, but at the time it was thought that Hollywood would be spared because the tariffs only applied to physical goods. However, even with the new announcements, it is not entirely clear how exactly this will work.

Film production takes place in different countries, and not only filming, but also scriptwriting, editing, post-production, visual effects, and many other elements, so it is not yet clear what exactly will fall under potential duties.

Morgan Stanley media analyst Ben Swinburne said it's hard to gauge the exact impact of tariffs on the industry or individual companies based on a single social media post. But he noted that a 100% tariff on some or all of the value of films would lead to fewer films and lower revenues for everyone in the business.

"Retaliatory tariffs are an add’l risk — it might give foreign govts an incentive to tax or block US streaming services and/or film releases," Swinburne said.

As a reminder, there were earlier reports that China may ban the screening of American films in response to Trump's tariffs.