U.S. media stocks fell Monday, May 5, after President Donald Trump announced 100% tariffs on all movies outside the United States, a move that could seriously affect Hollywood’s global business and the wider entertainment industry.
The proposed tariff, while lacks specific details, is whether it applies to streaming platforms, movies released by dramas, or is calculated based on production costs or box office revenue.
According to data from the U.S. films generated $22.6 billion in exports in 2023, resulting in a $15.3 billion trade surplus. The potential impact of tariffs comes at a time when Hollywood is increasingly relying on international production centers. A recent ProdPro survey shows that the five preferred production locations planned for studio executives from 2025 to 2026 are all outside the United States, largely driven by tax benefits and cost efficiency.
Analysts told Reuters that streaming services, especially Netflix, may be the most vulnerable to tariff policies. Netflix has built its content model around a global production network designed to deliver localized and international content. After the announcement, Netflix’s stock fell 4.9% in listing trading, causing a decline in the media sector stock.
Despite Los Angeles’ reputation as a center of the film industry, the top 10 Oscar competitors of the year have not been filmed in the city this year, highlighting the extent to which production has shifted overseas. Many studios are now operating through global supply chains, shooting in Europe, post-production in Canada, and outsourcing visual effects work to Southeast Asia. Forced production returns can greatly increase costs.
Shares of major entertainment companies including Walt Disney Co, Warner Bros, Discovery and Universal Emanter Comcast also fell on Monday, down 0.8% to 2.7% amid investors’ concerns about the financial impact of the proposed tariffs.
