Former United States President Donald Trump has ignited controversy in the entertainment industry by proposing a 100% tariff on all foreign films entering the country. Trump announced this initiative on Truth Social, asserting that Hollywood is "dying a very fast death" and tasking the Department of Commerce and the US Trade Representative (USTR) to implement the tariff. This move has raised concerns about its potential impact on the Indian film industry, which relies significantly on the Indian diaspora for overseas revenue.

The New York Times has questioned whether the tariffs would extend to independent foreign-language films, movies receiving foreign tax incentives, productions with scenes shot overseas, or films with overseas post-production visual effects work. Exhibitor Akshaye Rathi suggests that instead of penalizing foreign industries, India should incentivize its own film industry and improve infrastructure. Trade expert Atul Mohan notes that Indian films can earn between ₹10 crore to 100 crore in the United States, depending on the star's appeal, and it remains unclear whether the tariff will affect movie ticket prices. Shibasish Sarkar, president of the Producers Guild of India, adopts a "wait and watch" approach, while filmmaker Vivek Agnihotri urges Indian film leaders to unite against this threat.

Filmmaker Shekhar Kapur commented that since over 75% of Hollywood's box office revenue comes from outside the US, Trump's tariff might encourage Hollywood to move production overseas, contrary to its intended effect.

The proposal has sparked fears of retaliation that could undermine America's dominant export industries. While Trump claims the move is to protect U.S. interests, analysts suggest it could expose vulnerabilities in the services trade, where the U.S. holds a substantial surplus, and trigger foreign restrictions on American movies. White House spokesperson Kush Desai clarified that no final decisions have been made regarding the film tariff plan.

Shares in U.S. media and entertainment companies, including Netflix and Warner Bros. Discovery, experienced a drop following the announcement. Government officials from Australia and New Zealand have already indicated potential countermeasures to defend their film industries.

Cui Fan, a professor at the University of International Business and Economics, suggests that the U.S. tariff could lead major film exporters to prioritize local films and limit quotas for American movies. Scott Roxborough of The Hollywood Reporter magazine warns that the tariff plan could have a catastrophic impact on the entire industry, already facing a crisis.

William Reinsch, a former senior official at the U.S. Department of Commerce, believes the retaliation could severely harm the U.S. film industry, and California, a key hub for Hollywood, would be particularly affected. The entertainment industry contributes significantly to California's economy, creating jobs and boosting tourism.

A recent report by the California Film Commission revealed a drop in on-location film production in Los Angeles. Film critic Pang Hongbo notes that the tariff could force low-to-mid-budget foreign art films to bypass U.S. theatrical releases and impact Oscar-qualifying films. Li Jun, director of the Services Trade Institute, argues that the tariff plan is counterproductive, undermining the global reputation and long-term interests of the U.S. services sector.