The entertainment world got a jolt last week—and not the good kind—when former President Trump floated the idea of slapping a whopping 100% tariff on foreign films entering American theaters. The proposal, just the latest in Trump's "America First" economic playbook, sent entertainment executives scrambling and investors reaching for the antacid.
Now, I've covered economic policy for years, and tariffs have always been politics' favorite zombie—they never stay dead no matter how many economists take aim at their fundamental flaws. But this particular tariff threat? It's almost deliciously ironic when you consider how the modern film industry actually works.
The International Reality Check
Look, here's what many folks don't grasp about today's Hollywood: those enormous Marvel spectacles and Fast & Furious sequels aren't made primarily for American audiences. They're global products. International box office receipts aren't just gravy—they're often the whole damn meal.
When I spoke with a studio executive last year (who wouldn't go on record because, well, politics), they put it bluntly: "We live and die by international numbers now."
The arithmetic isn't particularly complex. If major markets like China, Japan, or European nations respond with their own 100% tariffs—and why on earth wouldn't they?—the ripple effects would hit faster than negative reviews on opening night.
Disney, Warner, Universal... they'd all be staring at quarterly projections that would make shareholders run for the exits. We're talking billions potentially vaporized.
Who's Got the Most to Lose?
The vulnerability isn't spread equally across the entertainment landscape:
AMC Entertainment might be the canary in this particular coal mine. Still wobbling from its meme-stock rollercoaster, AMC doesn't show tons of foreign films, true. But if international markets shut out American blockbusters in retaliation? Those expensive IMAX screens might start looking mighty empty on Friday nights.
Disney (I've tracked their international strategy since 2016) has perhaps the most exposed flank. Their recent pivot to fewer, bigger "event films" makes perfect sense in a global marketplace—but it's a disaster waiting to happen if international markets suddenly become cost-prohibitive. And remember, Disney isn't just selling movie tickets; they're selling an ecosystem of merchandise, theme park experiences, and Disney+ subscriptions.
Netflix, trading near its 52-week high, might seem insulated at first glance. But having covered their content strategy shifts, I can tell you their international programming investments weren't made on a whim. They're central to subscriber growth. Restrict foreign content when competitors are breathing down your neck? That's a plot twist no executive wants to navigate.
Amazon, well... Prime Video is just one tentacle of Bezos' empire. They'd feel the sting, particularly after investing in international acquisitions, but the broader company wouldn't exactly collapse. (Their shareholders might barely notice, honestly.)
Beyond the Obvious
The thing that fascinates me about these potential tariffs—having covered economic policy fallout for more than a decade—is the cascade of secondary effects that aren't immediately obvious.
Consider film festivals. Sundance, Tribeca, SXSW. These aren't just artsy gatherings for cinephiles in black turtlenecks. They're economic engines for entire communities and launching pads for careers. I've been to Park City during Sundance—the restaurants, hotels, even the guy selling hand warmers on the corner depends on that festival economy.
Without diverse international films? These festivals wither. And with them, so does an entire ecosystem of indie film financing and distribution.
The production world would shift too. Hollywood might initially celebrate less foreign competition (though I doubt it), but the inevitable international retaliation would force painful contractions. Fewer productions means fewer jobs—not just for actors and directors, but for the thousands of specialists from caterers to costume designers who make their living project-to-project.
And culturally? That's harder to quantify but impossible to ignore. American audiences would find their cinematic diet increasingly homogenized. Meanwhile, international audiences might discover they can manage quite nicely without the latest American blockbuster, thank you very much. Cultural soft power doesn't show up on quarterly earnings calls, but its erosion has long-term implications for American influence globally.
What's an Investor to Do?
First off, breathe. We're talking about campaign trail rhetoric that may never become policy reality. Markets hate uncertainty, but they're particularly terrible at pricing in these low-probability, high-impact scenarios.
If you're holding entertainment stocks, this isn't necessarily your cue to sell. But it's absolutely something to monitor—especially for Disney and Netflix, where international exposure runs deepest.
The contrarian play? Maybe look at international entertainment companies that could benefit from reduced American competition in their home markets. Though I've found that finding pure-play options with adequate liquidity can be challenging for American investors without specialized brokerage access.
The Bigger Picture
What strikes me most about this whole affair (and I've seen plenty of economic policy threats come and go) is what it suggests about the future of economic nationalism. If we're seriously contemplating tariffs on films—cultural products that have historically crossed borders with relative ease—what's next? Music? Video games? Software and digital services?
The global entertainment economy has become so thoroughly intertwined that trying to unravel it through tariffs is like attempting to extract just the blueberries from a baked muffin. It's messy, ineffective, and ultimately leaves everyone with sticky fingers and a subpar breakfast.
As wild as a 100% tariff on foreign films might seem, it's worth remembering that in today's market environment, even seemingly far-fetched policy proposals can quickly become your portfolio's problem. Because in the real-world drama of financial markets, the most disruptive plot twists aren't fictional—they're buried in regulatory announcements and campaign promises that can reshape entire industries almost overnight.
That, I believe, is the real blockbuster we should all be watching carefully.
