Every Tuesday afternoon we publish a collection of topics and give our expert opinion about the Equity Markets.

On International Star Wars Day, May 4th, Trump took aim at his latest tariff target, the Movie Industry. In a move that has already stirred fierce debate across the entertainment and trade worlds, President Trump has directed the commerce department to levy a 100% tariff on foreign-made films. Ostensibly aimed at reviving domestic film production and protecting American cultural output, the implementation of such a tariff is far from straightforward. ABSI this week analyses the latest Trump trade war target.

Source:  Truth Social

In modern society, movies aren’t fungible goods. They’re digital and are consumed by audiences through cinema attendance or through digital streaming platforms. This makes a traditional import tariff very difficult to apply in comparison to its physical counterparts. Getting around this for movies shown at a cinema could be implemented fairly easily as a surcharge on ticket sales for non-US productions, but what about for streaming platforms where the consumer pays for a subscription for access to a library of content? A more complicated tax tied to viewership metrics for foreign content is one solution, the mechanics of which are complex. 

It is important to appreciate that several countries already do something similar, albeit with softer intentions. France, for example, requires platforms like Netflix to contribute a portion of their revenue to domestic content production, and the Albanese government has been seeking domestic content quotas for streaming services in Australia. But a 100% punitive tariff would go far beyond that, essentially doubling the cost of showing a foreign film in U.S. cinemas or on streaming platforms.

The tariff talk comes at a time when the film industry has never been more global. Over the past two decades, film production has increasingly moved offshore as studios chase lower costs, tax credits, and world-class facilities outside the U.S., particularly in countries like Canada, the UK, Australia, Hungary, and New Zealand.

Even within the United States, production has shifted away from traditional hubs like California and New York toward states like Georgia and New Mexico, which offer aggressive tax incentives and lower overheads.

However, despite the globalisation of production, the U.S. remains the most important film market in the world. In 2025, the U.S. is expected to generate US$11.5 billion at its domestic box office or 26.5% of the global market share, while U.S.-based platforms like Netflix, Disney+, and Amazon Prime dominated global streaming viewership.

Source: eMarketer

For international filmmakers, access to American audiences is critical, both for financial returns and global prestige. A 100% tariff would force smaller foreign studios to pull their releases entirely from U.S. cinemas, and streaming services might start excluding foreign content to avoid regulatory complications. That would be a loss not only for the creators but for U.S. audiences, who now expect a rich menu of global storytelling—from Korean thrillers to British dramas and European documentaries.

The goal of the tariff is to “reshore” production but it doesn’t address the structural issues that resulted in an exodus in the first place. The U.S. is plagued by higher labour costs, union regulations, limited tax incentives, and an overall higher cost of production. Having said that, if reshoring is achieved, then the winners won’t be Hollywood but more likely states like Georgia, Louisiana, and New Mexico, where generous tax programs and growing infrastructure already make them attractive alternatives to overseas locations.

The U.S. is not the only country that values cultural exports, and a film tariff may prompt retaliatory measures. Countries such as France, the UK, South Korea, and India—all major exporters of film and television—could respond by restricting U.S. films, taxing American platforms, or enacting new content quotas. Hollywood studios, which earn the majority of their revenue abroad, would be particularly vulnerable. The overseas market accounts for 60–70% of box office revenue for major franchises, meaning any retaliation could easily erase whatever domestic gains a tariff might bring.

On a final note, films are not just commerce, they’re culture. The U.S. has benefited greatly from Americana i.e. spreading its culture to allies and enemies alike through film. Limiting access to global cinema risks cultural isolation and undermines a product which has national security elements to it. 

Trump's idea of a 100% tariff on foreign-made films is headline-grabbing, but it is also legally fraught, economically risky, and culturally short-sighted. While the goal of bringing production back to U.S. soil is not without merit, tariffs alone are a blunt tool for a deeply complex industry. Without careful design, such a policy could do more harm than good, shrinking access for U.S. audiences, straining diplomatic ties, and triggering a global backlash against Hollywood.

Introducing BPC Wealth Management

BPC Wealth Management is dedicated to shaping resilient investment portfolios, empowering you to achieve and sustain your financial aspirations. While the foundation of your portfolio focuses on long-term investments, through BPC, clients will be offered opportunities in equities trading and equity capital markets. This aspect is highly customised, allowing asset flexibility. Discover how our proactive and client-focused approach can help you achieve your financial aspirations by booking your discovery call with James Whelan. 

We offer value-rich content to our BPC community of subscribers. If you're interested in the stock market, you will enjoy our exclusive mailing lists focused on all aspects of the market.

To receive our exclusive E-Newsletter, subscribe to 'As Barclay Sees It' now.