Media stocks fell Monday following President Trump’s call for a 100% tariff on all foreign-produced films.
Netflix (NFLX), Warner Bros. Discovery (WBD), and Paramount Global (PARA) each slipped around 2% after paring steeper losses earlier in the session. Disney (DIS) closed just below the flatline.
The market moves followed Trump’s directive late Sunday for his administration to impose “a 100% tariff on any and all movies coming into our country that are produced in foreign lands.” The announcement sent shockwaves through Hollywood, which has struggled to rebound from the pandemic and recent writers’ and actors’ strikes.
“The Movie Industry in America is DYING a very fast death,” Trump wrote in a post on Truth Social. “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. This is a concerted effort by other Nations and, therefore, a National Security threat.”
Speaking Monday in Washington, D.C., Trump defended the proposal but said he will be meeting with the industry to discuss the plans further.
“I’m not looking to hurt the industry. I want to help the industry,” he said. “I want to make sure they’re happy with it because we’re all about jobs. … It’s a big industry, but it’s an industry now that’s abandoned the USA where it started. We’ll get it back.”
Earlier this year, Trump appointed a trio of actors — Jon Voight, Sylvester Stallone, and Mel Gibson — as his “special ambassadors” to Hollywood. He introduced the initiative in January, describing Hollywood as “a great but very troubled place.”
‘Insane and devastating’
Trump’s announcement follows China’s move to “moderately reduce” imports of Hollywood movies in retaliation for escalating US tariffs on Chinese goods.
The proposed tariffs could affect several blockbusters filmed abroad, including Disney’s “Avengers: Doomsday” and “Spider-Man: Brand New Day” (London), 20th Century’s “Avatar: Fire and Ash” (New Zealand), Paramount’s “Mission: Impossible — The Final Reckoning” (global locations), Lionsgate’s Ballerina (Czech Republic), and Lucasfilm’s “Star Wars: Starfighter” (UK).
Read more: The latest news and updates on Trump’s tariffs
“Until there is more clarity, this new development — which should’ve been predicted by all Hollywood C-suites — will likely slow down the business or, in a worst case, shut it down in exactly the same way that the strikes affected Hollywood,” Chris Fenton, a longtime Hollywood executive, told Yahoo Finance.
Veteran film producer Kathryn Arnold called the proposed tariffs “insane and devastating,” warning they could wipe out lower- to mid-budget films by driving up costs and disrupting a globally interconnected system.
“If films are forced to be made here, the pricing of labor and goods and services is higher. Budgets will go up,” she said, noting US tax incentives aren’t nearly enough to offset domestic production costs.
The ripple effects, she added, would hit everyone from crew to catering.
Hollywood tariff unknowns
Despite the initial stock declines, many unknowns remain about how such a tariff rollout would be structured and what the implementation might look like. Some key questions include whether the tariffs would apply to all forms of distribution, including streaming platforms, or just theatrical releases.
It’s also unclear how existing international co-productions would be treated. Industry insiders warn the policy could create logistical and legal complications for studios with global production pipelines.
“With only a single social media post to go on, [it’s] virtually impossible to size the impact to the industry or specific companies today,” Morgan Stanley analyst Ben Swinburne wrote in reaction to the news on Monday.
He warned 100% tariffs could result in fewer, more expensive films and lower industry earnings, particularly for Netflix, which produces more films than any other studio and derives up to 30% of its viewership from film content. Until now, investors had considered Netflix a “safe haven” amid recent tariff-related turbulence.
Swinburne also flagged potential retaliatory moves from foreign governments, which could target US streaming platforms or restrict film releases abroad.
Alexandra Canal is a Senior Reporter at Yahoo Finance. Follow her on X @allie_canal, LinkedIn, and email her at alexandra.canal@yahoofinance.com.
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