Hollywood’s top studios and streaming services saw stocks fall Monday morning after President Trump vowed to implement a 100 percent tariff on movies made abroad.
In early morning trading, Netflix dropped around 4 percent, Disney fell more than 2 percent, and Warner Bros. Discovery was down more than 3 percent. Paramount fell more than 2 percent, and Comcast, which owns Universal, fell about 1 percent, CNBC reported.
The drop came as top Hollywood executives reacted to Trump’s announcement about putting tariffs on foreign-made films.
“The Movie Industry in America is DYING a very fast death. Other Countries are offering all sorts of incentives to draw our filmmakers and studios away from the United States. Hollywood, and many other areas within the U.S.A., are being devastated,” Trump said in post online Sunday.
He argued that it’s a “concerted effort” from other countries and is therefore a national security threat, calling it messaging and propaganda.
“Therefore, I am authorizing the Department of Commerce, and the United States Trade Representative, to immediately begin the process of instituting a 100% Tariff on any and all Movies coming into our Country that are produced in Foreign Lands. WE WANT MOVIES MADE IN AMERICA, AGAIN!” he said.
It’s unclear how Trump’s movie tariff would be implemented on intellectual property. It will likely face legal challenges from various industry members, including over free speech.
It’s also unclear who exactly would be targeted under Trump’s Hollywood tariffs and who would pay if tariffs are implemented.
Many studios have production hubs around the world, as many have filmed movies overseas for years. Production companies may choose to film internationally for various reasons, including tax benefits or filming at a precise location without needing a set.
Wedbush Securities’s Alicia Reese wrote to investors on Monday that large studios, distributors and independent studios “carry a significant amount of risk as they will have to lobby the Trump administration to set a reasonable standard for films that require live sets in foreign settings,” CNBC reported.
She estimated that 75 percent of Netflix’s content is produced outside the U.S. and foreign language movies and television shows make a significant portion of the streaming service’s content. Reese noted that most of Netflix’s content is filmed by a third-party studio, and the company has little say over where that content is filmed.
When Trump first implemented a 25 percent tariff on Canada, a popular hub for Hollywood filming, industry experts told CNBC that it wouldn’t have a major impact on production.
Tariffs on intellectual property are a new issue that raise questions for the industry.
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