President Donald Trump’s latest protectionist proposal is sending a shiver through Hollywood.
The President's proposed tariffs on foreign-produced films entering the US pose a “significant amount of risk” to companies such as Disney, Warner Bros. Discovery, Paramount, Comcast’s NBCUniversal, Lionsgate, and Sony, according to Wedbush.
Trump’s suggestion—vague in detail but clear in tone—has prompted concern across the entertainment industry, particularly among major studios and distributors that rely heavily on international locations for cost and creative reasons.
At issue is how the tariff would be structured—and whether partial US production would be enough to sidestep it.
“If there is some production in the US, a tariff could be avoided or minimized,” the analysts wrote in a note Monday, suggesting studios may be forced to retool their logistics and relocate set pieces to American cities, unless those cities can match the lucrative tax incentives often provided abroad.
The mechanics of any such tariff remain unclear. Tariffs traditionally target the import of goods—making them easier to apply to physical media like DVDs. But when it comes to intellectual property and digital streaming, enforcement is murkier. “A tariff on DVD imports is easy to enforce; a tariff on intellectual property is nearly impossible,” Wedbush noted.
The ambiguity is particularly relevant for Netflix. The streaming giant, which spends about $18 billion annually on content, produces roughly three-quarters of that content outside the US, according to Wedbush estimates. That includes most foreign-language programming and a sizable chunk of English-language series shot in cost-friendly locales like Canada and the UK.
The analysts estimate that only $2 billion to $3 billion of Netflix’s newly produced annual content would be affected by a foreign production tariff. “The balance of its spending is for content that was produced prior to the materialization of Trump’s whim and caprice,” the firm said.
The ultimate financial impact, then, depends on whether the policy targets existing content or only new production, and whether it would apply to theatrical releases, streaming, or both.
Even if such tariffs were implemented, Wedbush sees a bumpy road ahead for enforcement. Foreign governments might retaliate with duties—or even bans—on American films. Meanwhile, Congress could push back on the grounds that it, not the president, has constitutional authority over tariffs. “We think the Trump administration will face tremendous pushback,” the analysts wrote.
Over the near term, Wedbush believes studios could partially localize production in the U.S. by adjusting their schedules and absorbing higher costs—at least temporarily. Long-term adaptation, however, might depend on U.S. cities stepping up with tax breaks to replace the benefits currently offered abroad.
For now, the Hollywood calculus is simple: Until there is clarity from Washington—or Mar-a-Lago—studios will have to brace for policy uncertainty while keeping the cameras rolling.