Shares in US streamers and production companies fell on Monday, after Donald Trump said he would introduce 100% tariffs on films made abroad, a move that couldsharply raise costs for Hollywood studios.
Trump’s announcement on his Truth Social platform, revived worries about the US president’s trade policy and its impact on the world economy.
Netflix shares were down 1.7% by early afternoon on Wall Street, Amazon fell 1.5%, while Warner Bros Discovery and Paramount dropped by 1.1% and 1% respectively. The tech-heavy Nasdaq index lost 0.6%.
The president said he had already ordered the commerce department and the US trade representative to begin instituting such a tariff, but his post did not say whether the levies would apply to films on streaming platforms as well as theatrical releases, nor did it detail whether tariffs would be based on production costs or box office revenue.
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Paolo Pescatore, a media analyst at PP Foresight, said: “It doesn’t feel like something that will happen in the short term as everyone will be grappling to understand the whole process. Inevitably costs will be passed on to consumers.”
The tariffs could hit Netflix in particular because the US streaming company relies on its global production network to produce content for international audiences. The cinema operators Cinemark and Imax were down 2% and 3%, respectively.
Despite their historic base in Los Angeles, Hollywood studios have over the years shifted production overseas to locations such as the UK, Canada and Australia to take advantage of generous tax credits and lower labour costs. The Hollywood strikes in 2023 secured higher pay and broader benefits for writers and actors.
Most of this year’s Oscar best picture nominees were filmed outside the US, and a survey by ProdPro of studio executives, asking them about their preferred production locations for 2025 to 2026, showed that the top five choices were overseas.
Forcing a return to US soil would push up production budgets and disrupt a global production supply chain that includes shooting in Europe, post-production in Canada and visual effects work in south-east Asia.
“The problem is that pretty much all the studios are moving tons of production overseas to reduce production costs,” said the Rosenblatt Securities analyst Barton Crockett. “Raising the cost to produce movies could lead studios to make less content.”
The UK media union Bectu urged the government to protect the country’s “vital” film sector, warning tens of thousands of freelance jobs were on the line.
