Major Hollywood studios –Netflix, Disney, Warner Bros. Discovery, Paramount, and Comcast — saw their stocks slide as early Monday morning trading began, just hours after President Donald Trump said his administration will begin imposing a 100 percent tariff “on any and all” foreign films coming into the United States because, as he said, “The Movie Industry in American is DYING a very fast death.”
As of this reporting, shares for entertainment giants were trending down. CNBC’s snapshot of the early market shifts:
- Netflix down around 4%
- Disney down more than 3%
- WBD down more than 5%
- Paramount down more than 2%
- Comcast down around 1%
President Trump sent shockwaves through Hollywood late Sunday, writing on Truth Social that while “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.”
“It is, in addition to everything else, messaging and propaganda!” Trump added. “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!”
Hundreds of films are shot in foreign countries, from Canada to Australia, every year and are boosted by various government-backed tax incentives. These foreign taxpayer-funded inducements, much like the film tax credits offered by Georgia, New York, and New Mexico, have served as pull factors for production out of California and have helped accelerate the catastrophic decline in film and TV productions in Los Angeles. Add in Golden State and local tax burdens and a byzantine nexus of regulation, two major strikes, and the recent L.A. fires, and Democrat Gov. Gavin Newsom’s utter inability to stop the production exodus. The California governor has yet to weigh in.
It all helped lead President Trump earlier this year to appoint entertainment industry veterans Jon Voight, Mel Gibson, and Sylvester Stallone as special envoys to help restore “the Golden Age of Hollywood.” So far, only Voight has taken up the task, reportedly meeting with members of the Directors Guild of America, the Teamsters, and IATSE. The Oscar-winning actor is said to have proposed a set of ideas to President Trump on how to revitalize the once-dominate American movie industry.
Meanwhile, Hollywood is in full-blown panic mode.
“It’s insane,” a veteran UK producer told Deadline.
“What a bombshell,” said a leading German producer.
“He will kill the U.S. industry quicker as this will increase the cost of U.S. films that already weren’t selling well internationally,” a French distribution told the Hollywood trade outlet. “Creating an incentive for shooting in the U.S. would have been smarter but I’m not sure he has that much intelligence.”
There are currently more questions than answers. A major piece of the scuttlebutt around Trump’s foreign film tariff announcement is the-long debated federal film tax credit. How that incentive policy factors in is also unclear. This, of course, is to be continued.
Read the full article here