Movie studio stocks fall after Trump proposes foreign film tariff

Investors in Hollywood’s top studios and streaming services were spooked Monday after President Donald Trump proposed implementing a 100% tariff on movies made overseas.

Shares of Netflix, Disney, Paramount and Warner Bros. Discovery fell ahead of the opening bell, with Comcast-owned Universal also trading slightly down. Here’s how those share moves shook out:

• Netflix down more than 5%
• Disney down more than 3%
• WBD down more than 3%
• Paramount down more than 2%
• Comcast down less than 1%

Trump called tax incentives offered by foreign countries “a national security threat” in a post on Truth Social Sunday night. He said he was authorizing the Department of Commerce to impose a levy on all films produced abroad that are sent to the United States.

How Trump intends to implement these duties is unclear, as is exactly who is being targeted and who would foot that potential tariff bill.

Hollywood studios have long filmed movies overseas, either for tax benefits or to capture the natural setting of international locations. Some films are shot in multiple countries, with many studios having satellite production hubs around the globe.

When Trump first instituted a 25% tariff on imports from Canada, a popular filming location for Hollywood movies and television shows, industry experts told CNBC that it wouldn’t have a major impact on production. After all, the majority of projects are shot digitally, and transporting the final product can be done online or with a data storage device. There isn’t a physical good that exchanges hands in the same way as, say, toys or clothing that’s made in another country.

Questions are already swirling. What part of the production process would be hit with this duty? Would it apply only to movie projects or will TV shows filmed internationally also incur this levy? Are already completed projects exempt?

Additionally, as with the first round of tariff announcements earlier this year, industry experts worry about how these duties will impact relationships with other countries. Hollywood relies on international box office sales to recoup lofty film budgets. China has already closed its doors to Hollywood product. Other regions could retaliate and do the same.

Disclosure: Comcast is the parent company of NBCUniversal and CNBC.