By Elsa Ohlen and Angela Palumbo

Shares of U.S. media companies fell as President Donald Trump took aim at the movie industry, saying he will impose a 100% import tax on films produced abroad.

"I am authorizing the Department of Commerce, and the United States Trade Representative, to immediately begin the process of instituting a 100% Tariff on any and all Movies coming into our Country that are produced in Foreign Lands," Trump wrote in a post on Truth Social on Sunday night. He referred to efforts by other countries to create incentives for domestic production as a national security threat.

"Although no final decisions on foreign film tariffs have been made, the administration is exploring all options to deliver on President Trump's directive to safeguard our country's national and economic security while Making Hollywood Great Again," a White House spokesperson said.

Netflix and Warner Bros both fell 1.5%, while Paramount was down 1%. Cinemark shares dropped 2.7%. Walt Disney and Comcast stocks both bounced back after initially opening in the red.

The S&P 500 was down 0.3%.

None of the companies immediately responded to requests for comment.

Trump's announcement comes after China said in April that it was cutting imports of American films following U.S. tariff decisions. A tariff on films also would mark a shift in the Trump administration's trade policy. Until now, the White House has focused on taxing physical goods, not services.

Benchmark analyst Matthew Harrigan said the tariff announcement "injects further noise into sentiment for essentially every entertainment stock."

While tariffs risk denting the profitability of movie makers because a decent chunk of Hollywood's output is shot overseas to take advantage of tax benefits and other incentives, the extent of the damage would depend on the fine print. It wasn't clear whether movies and TV shows shot overseas but finished in the U.S., or content made abroad but available to U.S. audiences, would be subject to the tariff.

Wedbush analyst Alicia Reese wrote in a research note on Monday that it was also unclear if these tariffs would be strictly designed for movies set for theatrical releases, or will also affect streamed-only films. That would be a crucial distinction for a company like Netflix, which releases its originals on its streaming platform.

"We think the large studios and distributors including Disney, Warner Bros Discovery, Paramount, Comcast/NBC Universal, Lionsgate, and Sony, and various independent studios carry a significant amount of risk as they will have to lobby the Trump administration to set a reasonable standard for films that require live sets in foreign settings while otherwise moving productions stateside for studio-based scenes," she wrote.

For now, analysts are sticking with their stock recommendations and share-price targets, though Reese noted that the news could weigh on movie companies in the near term. She reiterated a Neutral rating on Cinemark with a price target of $32, citing uncertainty around tariffs.

Write to Elsa Ohlen at elsa.ohlen@barrons.com and Angela Palumbo at angela.palumbo@dowjones.com

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May 05, 2025 13:18 ET (17:18 GMT)

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