Trump’s 100% movie tariff could backfire and trigger the ‘biggest risk’ for U.S. studios, analyst warns

• President Donald Trump offered a 100% price on films on Sunday Produced outside the United States, the move has made investors of American streamers and studios, and actions for companies like Netflix and Paramount Slid. Analysts warn the price, although not finalized, would lead to cheaper and more expensive films.

While President Donald Trump is trying to impose a 100% price on the films produced outside the United States, investors of film production studios become nervous.

The stock prices of major studios and streaming companies slipped after the news, Netflix shares negotiating on Monday at noon, and paramount actions plunging approximately 0.7%. Disney and Universal Parent Comcast collapsed in trading before the market on Monday before rebounding mainly at their respective prices at the end of Friday.

Trump said in a Sunday Social media message He plans to implement taxes on foreign films as a means of preventing the American cinema industry from “dying of a very fast death”.

“Other countries offer all kinds of incentives to distance our filmmakers and studios from the United States,” he said. “Hollywood and many other areas in the United States are devastated. It is a concerted effort of other nations and, therefore, a threat of national security. ”

White House spokesperson Kush Desai, said in a statement Fortune There was no final decision on the prices of foreign films.

“The administration explores all the options to deliver the directive of President Trump to protect the national and economic security of our country while making Hollywood very well,” said Desai.

We, the studios, have turned more and more towards Summanding projects abroad To take advantage of the tax advantages or find unique locations for movies for televisions. Netflix announced in February planned for Invest $ 1 billion To produce films and series in Mexico in the next four years.

According to a report From the OLSBERG SPI entertainment consulting company, 36 European countries and 15 Asian countries offered incentives in film production in 2024, against 17 European countries and 7 Asian countries offering tax credits and discounts in 2017.

Analysts warn against the consequences of the price

While Trump suggested that the foreign film rate would make American filmmakers and studios a boost, analysts warn that the decision could have the opposite effect, leading to an increase in production costs that would cause studios to make difficult decisions.

“100% prices on a part or all of the cost of a film … would lead to less films, to more expensive films and to a drop in earnings for all in the company,” wrote Benjamin Swinburne, analyst and chief research on American media in Morgan Stanley, in a note from Monday to investors. “The reality is that for any given film, there can be writing effects, production, publishing, post -production, faces – everything in different countries.”

In 2023, American films brought in $ 22.6 billion in exports and contributed to a trade surplus of $ 15.3 billion for industry, according to data of the cinematographic association.

The information on what the levy proposed by Trump included is sparse, which led Swinburne to raise questions on projects – such as current or recently finished shooting – would be impact, and if the tariff movement sets up a path for television filming abroad to also be taxed.

The most concerning for him is the potential risk that countries impose reprisal prices on American projects or potentially block American outings.

“Will foreign governments react by blocking the export of American content, through theaters or streaming or both?” Swinburne said in his note. “It may be the greatest risk, which increases American streaming services to tax at significantly higher rates or even reduce the scope of Hollywood content.”

This story was initially presented on Fortune.com