Trump announces 100% tariff on foreign-made movies

(CNN) — President Donald Trump said in a Truth Social post on Monday he will be imposing a 100% tariff “on any and all movies that are made outside of the United States.” Trump did not specify when or how the tariff could be enacted. If Trump follows through with his threat, it would mark the first time he’s essentially imposed a tariff on a service rather than a good. The president initially threatened a 100% tariff on foreign-produced movies in May, arguing that other countries offer tax incentives that have drawn filmmakers abroad. In his post on Monday, he singled out California, saying the state “has been particularly hard hit!” The state, meanwhile, has proposed and put in effect many tax incentives, as have other American cities. Hollywood was completely caught off guard when Trump first previewed the tariff in May. “On first blush, it’s shocking and would represent a virtually complete halt of production,” one industry insider told CNN at the time. “But in reality, he has no jurisdiction to do this and it’s too complex to enforce.” American actors and directors generally prefer to work close to home. But “the fact is, it’s cheaper for Hollywood studios to pay for everyone to get on planes, pay for hotels, because the cost of labor, lack of rebates and the ability to make things overseas is infinitely cheaper,” Jay Sures, vice chairman of United Talent Agency, told CNN in May. Share of Netflix (NFLX) opened down 1% Monday morning following Trump’s post, while other movie-related companies, including AMC (AMC) and The Walt Disney Company (DIS), opened higher. Although Hollywood is far from devastated, movie tickets are down in the United States as the number of major pictures hitting theaters has tumbled since the pandemic — and consumers have shifted their viewing habits to streaming platforms to watch at home. US box office gross topped out at just under $12 billion in 2018 before nosediving to just over $2 billion in 2020, when many theaters were shut down because of Covid. Although theaters have rebounded, the number of releases is about half of what it was in 2019, and the total domestic box office gross hasn’t eclipsed $9 billion since. Warner Bros. Discovery, which was CNN’s parent company until a recent split, has raked $4 billion in global box office sales so far this year, the first studio to hit that level.

More tariffs in the works

Beyond films, Trump is readying up a slew of other tariffs. As of Wednesday, the administration is set to impose a 100% tariff on branded drugs, with some exceptions; a 25% tariff on heavy trucks; a 50% tariff on kitchen cabinets and vanities; as well as a 30% tariff on upholstered furniture. In a separate social media post on Monday, Trump said he plans to impose a “substantial” tariff on all furniture imported into the United States.

Related: Inflation could be a third lower without tariffs, financial decision makers say

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