Tariffs on the Big Screen: How Trump’s Movie Tax Threatens Netflix, Disney, and EMI’s Bottom Line

The U.S. film industry faces an unprecedented shake-up as President Donald Trump’s proposed 100% tariff on foreign-made movies sends shockwaves through entertainment stocks. Netflix (NFLX), Disney (DIS), and EMI—key players in global content production and distribution—are among the hardest-hit companies, with their stocks reeling from fears of soaring costs, retaliatory trade measures, and logistical chaos.

The Tariff’s Uncharted Territory

Trump’s May 2025 announcement framed the tariff as a national security measure to revive U.S. film production, which has declined by 26% since 2021 due to studios shifting to cheaper locales like Canada and New Zealand. The policy targets movies filmed abroad, but its enforcement remains a legal and logistical black hole. For instance, hybrid films like Mission: Impossible – The Final Reckoning, shot across multiple countries, could defy categorization.

The Motion Picture Association (MPA) highlights that U.S. studios already enjoy a $15.3 billion trade surplus in films, but the tariff’s ripple effects could backfire. Retaliation from trade partners—such as China, which recently reopened its market to Hollywood films—could slash international revenue for Disney, whose global box office contributes over half its film income.

Netflix: Navigating a Costly Content Minefield

Netflix’s global strategy hinges on diverse content libraries, including international originals like Money Heist (Spain) and Sacred Games (India). A 100% tariff on foreign productions would force Netflix to either absorb higher costs or raise subscription fees—a risky move given its already fragile subscriber retention.

Netflix’s stock has fallen 18% year-to-date, with analysts speculating that tariffs could exacerbate its struggles. If prices rise, viewers may defect to cheaper alternatives like free ad-supported streaming, further squeezing margins.

Disney: A Double-Edged Sword for Global Dominance

Disney’s Marvel and Star Wars franchises dominate global screens, but their international production networks—such as Marvel’s Eternals, filmed in Australia—are vulnerable. The tariff could inflate costs for Disney’s $6 billion-a-year film division, squeezing profits.

Disney’s stock has dropped 14% since the tariff’s announcement, with investors questioning whether the company can offset costs without alienating audiences. Legal risks also loom: California’s Governor Gavin Newsom has called the tariff legally dubious under the International Emergency Economic Powers Act (IEEPA), which may limit Trump’s authority.

EMI: India’s Film Industry in the Crosshairs

EMI, a major distributor of Indian films like Pathaan and Jawan, faces a unique challenge. The U.S. accounts for over 70% of revenue for some Indian films, but tariffs could double distribution costs. Suniel Wadhwa of Karmic Films warns that Indian distributors may cut releases or raise prices, hurting fan engagement.

EMI’s stock has plummeted 12% in a month, with analysts predicting a further 5–7% drop if tariffs proceed. The firm is reportedly exploring cost-cutting in production or subscription pricing—a strategy that risks alienating content creators and audiences alike.

The Geopolitical Gamble

The tariff’s broadest threat lies in its potential to spark a global trade war. The U.S. film export industry, valued at $22.6 billion, could face retaliation from countries like the EU or China, which might impose tariffs on American streaming services. For Netflix and Disney, this could mean losing access to critical markets just as they expand globally.

Conclusion: A High-Stakes Stakes Game

Investors in Netflix, Disney, and EMI face a precarious balancing act. While the tariff’s legality and enforceability remain uncertain—legal experts note Trump may lack the authority to implement it—the market’s reaction is already clear.

• Netflix and Disney: Their stocks have declined sharply, reflecting fears of margin compression and geopolitical fallout. A reversal of the tariff or a negotiated solution could spark rebounds, but the companies must navigate rising production costs regardless.
• EMI: Its 12% decline underscores the vulnerability of India’s film industry to U.S. trade policies. Without U.S. market access, EMI’s growth could stall, though its domestic focus may offer a lifeline.

The path forward hinges on legal challenges, trade negotiations, and consumer tolerance for price hikes. For now, investors are right to be cautious: the entertainment sector is bracing for a storm, and the stakes couldn’t be higher.