Trump's Strategy to Rescue the 'Declining' Film Industry Through Tariffs Sparks Confusion and Panic on Wall Street

      Hours after President Donald Trump threatened to implement “a 100% Tariff on any and all Movies coming into our Country that are produced in Foreign Lands,” the White House reassessed the notion.

      Trump perplexed the film industry and caused alarm on Wall Street with a post on Truth Social on Sunday evening, stating: “The Movie Industry in America is DYING a very fast death. Other Countries are providing all kinds of incentives to draw our filmmakers and studios away from the United States. Hollywood, along with many other areas in the U.S.A., is being devastated. This is a coordinated effort by other Nations and, therefore, poses a National Security threat. It is, in addition to everything else, messaging and propaganda!”

      He continued: “Consequently, I am authorizing the Department of Commerce and the United States Trade Representative to promptly initiate the process of establishing a 100% Tariff on any and all Movies entering our Country that are made in Foreign Lands. WE WANT MOVIES MADE IN AMERICA, AGAIN!”

      Trump's Commerce Secretary, Howard Lutnick, reacted on X: “We’re on it.”

      However, on Monday, White House spokesperson Kush Desai rolled back Trump's Truth Social announcement, stating: “Although no final decisions on foreign film tariffs have been made, the administration is looking into all options to fulfill President Trump’s directive to protect our country’s national and economic security while Making Hollywood Great Again,” Desai informed The Hollywood Reporter.

      On Monday morning, prior to market opening and before Desai clarified Trump's statement, Netflix shares suffered the biggest decline among major entertainment stocks, dropping over 5 percent. By the end of the day, they had somewhat recovered, ending down 1.94%. Warner Bros. Discovery shares fell 1.99%, Paramount shares dipped 1.57%, and Disney shares decreased by 0.41%.

      Barclays analysts noted in a research report regarding the movie tariffs, “If this is implemented on a wide scale, it may ultimately harm the very industry it is intended to support.”

      Trump portrayed the tariffs as a remedy for Hollywood, which has seen a decline in business in recent years due to locations like the United Kingdom, Ireland, Spain, and Serbia offering tax incentives and lower production costs.

      However, few in the film industry — known for its aversion to Trump — embraced the idea of tariffs.

      Trump's Tariff Plan Lacks Specifics

      This year, Trump’s often inconsistent tariffs have disrupted small businesses, large sectors, and international trade, as he has imposed and lifted various tariffs unpredictably. Now, Hollywood faces similar uncertainty.

      Trump's announcement failed to consider that many films are international collaborations, featuring scenes filmed on a soundstage in Los Angeles, exteriors captured on another continent, with VFX handled in Vancouver.

      Many immediate questions arose, as often happens when Trump unveils policies (or proposed policies) through social media. Some of these questions include:

      — Will the tariffs apply only to films produced entirely overseas? Or also to films that film a few scenes abroad?

      — Will the tariffs impact TV series, such as Squid Game and HBO's Game of Thrones spinoff House of the Dragon? Or solely films?

      — Who will bear the cost of the tariffs? Will audiences experience a significant rise in ticket prices or streaming fees?

      — Is this, like many of Trump's announcements, merely a starting point for negotiations?

      The tariff discussion arises at a challenging moment for Hollywood, which is already reeling from last year's strikes and the Los Angeles fires in January. During a Sunday appearance on C-SPAN, Trump attributed the issue to California’s Democratic Governor, Gavin Newsom, when asked about the tariffs.

      “I’ve conducted some thorough research over the past week, and we’re making very few movies now. Hollywood is being destroyed. Now, you have a… grossly incompetent governor that allowed this to happen, so I’m not only blaming other nations, but other nations have taken our movie industry,” Trump stated.

      A spokesperson for Newsom responded strictly, informing Deadline: “We believe he has no authority to implement tariffs under the International Economic Emergency Powers Act, as tariffs are not listed as a remedy under that statute.”

      Another representative of Newsom simply remarked to THR: “Looks like it’s distraction day again in Washington, D.C.”

      Main image: Donald Trump in Home Alone 2. 20th Century Studios

      Editor’s Note: Updates provided throughout, including White House statement and stock declines.