Streaming Stocks Plunge as Trump Orders 100% Tariff on Foreign Films

U.S. streaming stocks experienced a widespread decline in pre-market trading, with Netflix leading the drop at 3.3%, followed by Warner Bros. Discovery at 3.2%, Amazon at 1.3%, Paramount at 1.1%, and Disney at 1%.

This market reaction came in response to an announcement by Donald Trump, who ordered a 100% tariff on foreign-made films. This move marks the first time the U.S. has extended its restrictive trade policies to the entertainment industry.

The specifics of how this tariff will be implemented remain unclear. One of the key uncertainties is whether the tariff will apply to films that have already been produced but not yet released, or if it will only affect new productions.

This policy shift is part of a broader trend of increased protectionism in the U.S., which has led to significant disruptions in various sectors. The impact of these tariffs is already being felt across the supply chain, with increased costs and reduced throughput at major ports.

For instance, the Port of Long Beach, one of the U.S.'s major ports, has seen a dramatic decrease in throughput, with 34 June voyages canceled. This situation is more severe than during the height of the COVID-19 pandemic. The port's CEO, Mario Cordero, noted that the additional costs incurred due to the tariffs could range from $1 billion to $3 billion.

Similarly, the Port of Los Angeles, the largest container port in the U.S., has also been significantly affected. In May, 17 voyages and 224,000 containers were canceled due to the tariffs. The port's executive director, Gene Seroka, warned that consumer prices are likely to rise as a result of these disruptions.

The broader economic impact of these tariffs is expected to be substantial. Consumer prices for goods like clothing and footwear, which are heavily reliant on imports, are projected to increase significantly. This will likely lead to a decrease in consumer spending and an increase in the cost of living for many Americans.

The entertainment industry, in particular, is likely to face significant challenges. The 100% tariff on foreign-made films could lead to a decrease in the availability of foreign content, potentially affecting the diversity of programming available to U.S. consumers. Additionally, the increased costs associated with producing and distributing films could lead to higher prices for consumers.

Overall, the implementation of these tariffs is likely to have far-reaching consequences for both the U.S. economy and the global entertainment industry. The full extent of these impacts remains to be seen, but it is clear that the U.S.'s protectionist policies are having a significant effect on a wide range of sectors.