How Donald Trump's 100% Tariff on Foreign Movies Can Hurt Bollywood - Explained

It’s been just 100 days since Donald Trump returned to the White House, and each day has brought a new act in his political theater. Now, Trump has turned attention to the entertainment industry with a dramatic twist in his “America First” policy. The US president has announced 100% tariffs on non-US movies, citing the need to protect the American cinema.

“The movie industry in America is dying a very fast death. Other countries are offering all sorts of incentives to draw our filmmakers and studios away from the United States. Hollywood and many other areas within the USA, are being devastated. This is a concerted effort by other nations and, therefore, a national security threat,” Trump wrote on Truth Social.

 “This is a concerted effort by other nations and, therefore, a national security threat. It is, in addition to everything else, messaging and propaganda! Therefore, I am authorising the Department of Commerce, and the United States Trade Representative, to immediately begin the process of instituting a 100 per cent tariff on any and all movies coming into our country that are produced in foreign lands. We want movies made in America, Again!” he added.

This move has not only confused people about its implementation, but may also leave ripple effects on Indian movies market in North America

How Will It Affect Bollywood?

Bollywood and Telugu movies has seen remarkable popularity latetly across the US, with several movies like Dunki, Jawan, and RRR have been gaining great traction among the Indian diaspora in America. As per report, RRR earned over $14.5 million in the US, while Jawan made $12.1 million in America. And recently, Vicky Kaushal’s Chhaava collected more than $5 million in North America in just two weeks. Together, Indian films reportedly grossed nearly $20 million at the US box office in 2023.

However, the fate of upcoming Indian films like Salaar and Kill is hard to predict at this hour due to a lack of clarity about its enforcement. While announcing the tariffs, Trump has not revealed whether the tariff would apply only to fully foreign productions or American studios filming abroad. The confusion isn’t restricted to this; it’s also unclear whether the tariffs will be implemented on OTT platforms like Netflix and Amazon Prime Video.

This bleak picture has shockwaves across the industry, especially those distributors who have already secured foreign films slated for release in the SU soon. These buyers can face the risk of significant financial setbacks on deals struck before the tariff announcement.

The distributors need to pay double amount to screen an Indian film in America. For instance, if the distributor purchases the rights for $2 million, then he has to pay as additional $2 million as tax. In short, the investment will double, but the profit margins may remain narrow.

How Indian Filmmakers Are Reacting?

Indian filmmakers like Vivek Agnihotri and Shekhar Kapur have sharply reacted to Trump’s decision to put 100% tariffs on foreign movies. Kapur sees the move as a catalyst for Hollywood's migration beyond US borders, while Agnihotri has termed the policy “disastrous”.

“'Over 75% of box office of Hollywood films come from outside the US. And a significant part of the budget of those films are spent outside the US. President Trump’s imposition of 100% tariff on all films imported into the US may encourage Hollywood to move outside the US! Quite the opposite of what he intended,” Kapur, who is known for films like Bandit Queen and Mr India, wrote on X (formerly Twitter).

Agnihotri said, “ALERT: Trump's 100% Movie Tariff Threatens Indian Cinema: Trump's 100% tariff on movies is a disastrous move. If this absurdity prevails, India's struggling film industry will collapse entirely, with no one to save it. Indian film leaders must wake up, unite, and fight this threat instead of chasing paparazzi and self-glorification”.

While Trump has voiced concerns for the American film industry, data from the Motion Picture Association paints a far more nuanced picture as it challenges the US president’s move. The latest report, as quoted by The Indian Express, revealed that the industry is not struggling, in fact, it is thriving globally.

In 2023 alone, the sector exported over three times what it imported, raking in a robust $22.6 billion from international markets. Domestically, the industry contributed $279 billion to the US economy and supported over 856,000 jobs across production, distribution, marketing, and manufacturing.

While that’s a slight dip from the previous year’s employment figures, it still represents a healthy upward trend from 2021. The numbers raise a fundamental question: If the industry is already profitable and globally dominant, is the recent move really about the country’s economic revival?