Key Takeaways

• A 100% tariff on foreign movies could take various forms. Some are straightforward but limited (physical media tariffs), while others are broader and more disruptive (tariffs on digital transmissions or discriminatory taxes on foreign value added).
• Targeted, subsidy-focused tools could address the President’s stated concern that film industry subsidies distort production decisions. But this approach would require new legal frameworks and investigative processes.
• Given the potential breadth of impact, industry stakeholders and foreign governments should prepare advocacy, legal, and operational strategies now, monitor the details of any proposed rules, and be ready to adapt quickly once specifics emerge.

According to President Trump, 100% movie tariffs are imminent. But what does that actually mean? While some label the idea “bizarre” and “impossible” to enforce, this paper highlights that tariffs have been imposed on imported movies before, and there are a number of mechanisms that the U.S. administration might explore in order to levy duties – each creating a different set of incentives and disincentives for industry stakeholders planning film projects.

Depending on the choices made, movie tariffs could result in an increasingly sophisticated approach to dealing with government-driven cross-border distortions to competition in services sectors. Or they could open a new front for protectionist U.S. (and copycat) trade policy, treating intellectual property (IP) value and data transmissions as a tariff base, thereby opening the door to tariffs on services and complicating cross-border licensing and cloud-based delivery models.

Either way, the President’s announcements regarding movie tariffs portend important changes. And not just for the film industry.

Background

On 29 September, President Trump indicated on Truth Social that he is planning to levy a 100% tariff “on any and all movies that are made outside of the United States," reviving an idea first expressed in May. The White House has not yet provided details on scope or timing, and it remains unclear what legal authority would be invoked.¹

The President’s concerns, as expressed in his Truth posts, appear to be twofold. First, that the U.S. film industry is “DYING a very fast death.” Second, this results from “Other Countries … offering all sorts of incentives to draw our filmmakers and studios away from the United States.” Cutting through the colorful rhetoric, the logic is that protective tariffs will offset the distortions caused by foreign subsidies.

Tariffs are typically understood as duties (i.e., a form of tax) imposed on imported goods and not domestic goods. They are usually enforced at the border by customs authorities. That makes movies an unusual target for tariffs because media content, like film (or music, sports broadcasts or TikToks) is fundamentally a service whose economic value is tied up in the intellectual property associated with the work being consumed. Media content nowadays is seldom traded across borders through physical media, such as DVDs. Instead, cross-border trade in movies most often takes the form of a flow of data.

Nevertheless, much like complex goods, such as cars or televisions, filmmaking involves a value chain, with value added by different entities at various stages from initial development, production (plus pre- and post-production) through to distribution. Value can be added anywhere in the world, and President Trump is undoubtedly correct that the location of parts of the movie value chain may be influenced by foreign (or U.S.) subsidies. Moreover, anytime something with value comes within U.S. jurisdiction, it could – in principle – be taxed.

Accordingly, despite the relative novelty (and leaving to one side whether it is a good idea or not), there is nothing extraordinary about the idea of imposing a duty or tax on foreign media content with domestic media content being exempt from the duty or tax. Indeed, as noted below, it has been done before.  

What might a tariff on movies look like?

Other than specifying that “100% tariffs” will be imposed on “foreign movies,” the President’s social media posts provide no detail on what constitutes a “movie” and what makes it “foreign.” Nor does it clarify how foreign movies would be valued for purposes of levying a duty. A tariff specialist used to dealing with the three key variables of customs classification, customs origin and customs valuation is left scratching their head.

In order to impose and collect some duty or tax on foreign movies, the administration would need to specify a clear tax base that could be subject to duty. Governments, as a rule, are very good at identifying tax bases. Without commenting on whether they are good ideas or not, we see at least four possibilities for imposing duties on foreign movies, drawing on examples that the international commercial community has seen before.

• Possibility 1: A 100% duty could be imposed on imported physical products (like VHS cassettes or DVDs) that embody foreign movie content. This approach is easy to impose, since it works within the existing framework of tariffs on traded goods. However, since most foreign movie content appears in front of U.S. consumers as a result of cross-border digital transmissions, targeting physical media would do little to address the problem concerning the President. Accordingly, increased tariffs on physical media might be part of a policy of imposing 100% tariffs on foreign movies, but it is unlikely to be the sole U.S. measure taken.
• Possibility 2 would follow the lead of Indonesia, which, in 2006, adopted a law imposing customs duties on “digital goods” (or “intangible products”). Indonesia established customs classifications in its harmonized tariff schedule (HTS) for such goods, including code 9901.30.00 “multimedia (audio, video and audio-visual)” (i.e., movies).² In 2023, it moved to develop and clarify requirements for customs declarations for digital goods falling within these classifications.

Indonesia only ever applied a zero tariff rate (i.e., nothing to pay) for digital goods imports, which is in line with a global moratorium on imposing customs duties on electronic transmissions. Even so, the United States – including the Trump administration – has consistently opposed Indonesia’s approach, recognizing that the United States is by far the world’s largest exporter of digital goods. Indonesia recently “committed to eliminate existing HTS tariff lines on ‘intangible products’ and suspend related requirements on import declarations” in its 2025 framework agreement for U.S.-Indonesia trade.³ It would be incongruous if the Trump administration were now to adopt Indonesia’s approach. But that approach may be the closest existing model to what the President has in mind for “foreign movies."

• Possibility 3 is less of a tariff and more of a discriminatory value-added tax, in which the proportion of foreign value add would be subjected to duty, with domestic value add exempt. It could be imposed at the time of an event, such as when a right-owner agrees to an upfront license fee or minimum guarantee with a distributor. Or it could be levied later, when the net proceeds of the film are measured.

As with Indonesia’s customs duty on “digital goods," this approach also has historical precedent, albeit from a time when value chains were simpler and foreign films were easy to identify. In the 1940s, New Zealand maintained what it labelled a “Film Hire Tax." The tax was levied on the net proceeds of film showings at cinemas, with New Zealand films exempt. Negotiators of the original General Agreement on Tariffs and Trade (GATT) deemed this to be a “customs duty”⁴ – a reminder that terms like “tariff” are somewhat flexible and can describe a range of measures.

• Possibility 4 would address, in a more targeted manner, the President’s stated concern that subsidies are distorting markets relevant in the creation of movies. This could, in principle, be done through creating a scheme of “countervailing duties” for services embodied in a movie. Or it could be done through extending principles found in competition law to remedy market distortions resulting from foreign subsidies.

The first approach is familiar in the world of trade in goods. Where a subsidy makes an imported product more competitive vis-à-vis a domestic industry, additional duties can be deployed to offset the subsidy. The second approach has been taken up in the European Union, which now has a “Foreign Subsidies Regulation” allowing the E.U. Commission to take the initiative to examine alleged foreign subsidies and take measures to “redress” market distortions caused by foreign subsidies, including in connection with service industries.

Neither of these approaches exist under current U.S. law. Both contemplate an investigative process preceding adoption of measures that are calibrated to address effects of specific subsidies. It is unlikely, therefore, that the Trump administration would follow these approaches to impose “100% tariffs on movies” in the short term. Nevertheless, to the extent that there is a bona fide concern that foreign film subsidies are hurting stakeholders in the U.S. film industry, these approaches could provide more targeted means to address the perceived problem.

So what? How can industry stakeholders and foreign governments react?

Despite suggestions that 100% tariffs on movies are impossible, they are technically feasible and can be pitched as a reasonable response to foreign subsidies. Whether wise or lawful is an open question. Still, stakeholders should prepare.

Advocacy strategies: Although President Trump has indicated that movie tariffs are imminent, the available options for imposing them are relatively complex. Moreover, the likely bases for Presidential action imposing movie tariffs⁵ all involve a process of analysis and evaluation, plus opportunities for public input. Accordingly, stakeholders may have time to influence the design of “tariffs on foreign movies” through advocacy strategies.

Policy advocacy could be particularly important because most of the options reviewed above have relevance beyond the film industry. For example, if the U.S. were to follow Indonesia’s “digital goods” approach to impose tariffs on movies, that would likely end the global moratorium on customs duties on electronic transmissions. The moratorium has broad relevance for service industries – according to the International Chamber of Commerce, the moratorium “has played an important role in preventing tariff escalation in the digital economy."⁶

Subsidies negotiations or trade disputes: Foreign governments have several avenues:

• Challenge compliance: U.S. trade partners could examine whether any U.S. measures comply with U.S. trade commitments. Many U.S. trade agreements, notably U.S. FTAs, have dispute provisions that could effectively be used against U.S. trade measures.
• Negotiate disciplines: Historically, unilateral U.S. action on subsidies has spurred international negotiations, sometimes yielding agreed disciplines. A U.S. move on film-related subsidies might catalyze broader talks on services and digital-content subsidies.

Practical business strategies: In the near term, commercial stakeholders should prepare for multiple scenarios and monitor developments closely.

• Review contracts and risk allocation: Stakeholders should consider how new U.S. duties might disrupt commercial agreements in their value chains. Just as car parts manufacturers have been examining whether “force majeure” clauses in their supply contracts cover contingencies like the overnight introduction of 145% duties on Chinese imports, so too do film industry contracts need to be reviewed to anticipate problems and commercial disputes that could arise if a “100% tariff on movies” is imposed.
• Evaluate compliance options: If new U.S. trade measures concerning movies are adopted, stakeholders will need to react based on the details of the rules actually adopted. Because the value chain of movies is complex, there may well be opportunities to optimize that value chain taking account of the incentives and disincentives that “100% tariffs” would create.
• Monitor legal authority: Stakeholders should also examine carefully the legality of new tariffs under U.S. law and consider how to respond, including through court action, where appropriate.

¹ We do not address the potential bases in U.S. law for imposing a “100% tariff on movies” in this note, except to note that the President’s favored legal basis for imposing tariffs – action under the International Economic Emergency Powers Act (IEEPA) – may not be lawfully available in this case. Specifically, that legislation explicitly excludes actions affecting importation of certain “information or informational materials”, including “publications, films, posters, phonograph records, photographs, microfilms, microfiche, tapes, compact disks, CD ROMs, artworks, and news wire feeds”, “regardless of format or medium of transmission”. This arguably includes movies. Further, the Trump Administration’s previous use of IEEPA to levy new tariffs is currently before the U.S. Supreme Court, with presidential action having been found illegal by various lower courts. Other likely bases for Presidential action against imports, including Section 232 of the Trade Expansion Act of 1962 and Section 301 of the Trade Act of 1974, require the administration first to conduct an investigation (including, in principle, public consultation). To date, there has been no public announcement regarding the initiation of Section 232 or Section 301 processes. 

² See “Indonesia’s perspective on customs duties for electronic transmissions," WTO Doc. WT/GC/W/859, 13 December 2022.

³ See “Joint Statement on Framework for United States-Indonesia Agreement on Reciprocal Trade," 22 July 2025.

⁴ Annex A to the GATT 1947 records that “The film hire tax in force in New Zealand on 10 April 1947, shall, for the purposes of this Agreement, be treated as a customs duty under Article I."

⁵ See footnote 1 above.

⁶ ICC (2025), Briefing note: “Practical Difficulties in Applying Tariffs to Services."