MC EXPLAINER Can Donald Trump even tariff a movie? The loopholes, box-office chaos and what it means for Indian cinema

A proposed levy on 'foreign-made' movies could price out Indian blockbusters in the U.S., disrupt streaming rights, and set up a global trade fight.

You’re in Edison, New Jersey, home to one of America’s largest Indian communities, lining up for a Bollywood blockbuster this Friday. But instead of the usual $15 ticket, you’re shelling out the price of a steak dinner. That’s the world Donald Trump is sketching with his threat to slap a 100 percent tariff on every 'foreign-made' film screened in the US.

And this isn’t small change. The US has become Bollywood and Tollywood’s most prized overseas market, minting millions for hits like Pathaan to RRR.

But here’s the twist: can you even tariff a digital movie file? Trump insists he can. If he follows through, the business of Indian cinema in America could be thrown completely off script.

What exactly did Trump say?

On September 29, Trump posted on Truth Social: “Our movie making business has been stolen from the United States of America, by other countries, just like stealing candy from a baby.”

He vowed a 100 percent tariff on all films made outside the US.

He also threatened 'substantial tariffs' on foreign-made furniture, saying North Carolina had 'completely lost its furniture business to China.'

But here’s the catch: there’s no legal paperwork, no timeline, no scope definition. Reuters noted that neither the White House nor major studios commented on how such a levy would even work.

Still, even a threat of tariffs rattles investors (Netflix stock dipped 1.5 percent after his post) and raises uncomfortable questions for foreign industries, including India’s $2.2 billion film segment.

The US is a gold mine for Indian films

Let’s break it down. Over the past decade, the US/Canada corridor has become a dependable box-office leg for big Indian releases.

Kalki 2898 AD (2024): $18.3 million in the US, 14.5 percent of its global haul.
Pathaan (2023): around $17–18 million in US theatres.
Jawan (2023): $15.2 million in the US
RRR (2022): $15.1 million stateside.

These are not side earnings. For many big-budget productions, North America alone contributes 12–15 percent of global box office, sometimes more. For Telugu cinema, the US diaspora is a core audience.

Now picture all those numbers under a 100 percent import levy. Margins collapse, distributors slash screens, and producers back home revise expectations downward.

The legal puzzle: can America even tariff a movie?

Here’s where it gets complicated.

Most films arrive digitally. US theatres receive a DCP (Digital Cinema Package) via satellite or secure server, not physical reels. Streaming is obviously digital.

WTO shield in place. Since the 1990s, WTO members, including the US, have agreed not to slap customs duties on electronic transmissions. That moratorium has just been extended to March 31, 2026. A 100 percent tariff on digital movies would breach that deal.

Movies are services, not goods. Global trade law classifies film rights as part of audiovisual services. The US traditionally runs a surplus in IP and services trade. Taxing films flips its own logic.

In short, a tariff on physical film prints is legally possible but irrelevant in 2025. A tariff on digital files or streaming would run headlong into international rules, and likely US court challenges.

Why Bollywood should still worry

Even if enforceability is murky, the optics and uncertainty are damaging. Distributors hesitate to buy rights if they don’t know the tax regime. Studios rework contracts. Producers hedge projections.

Diaspora pinch: In hubs like Dallas, Fremont or New Jersey, a sudden jump in ticket prices risks thinning crowds for anything short of a mega-event film.

Mid-tier films get axed: Big tentpoles (Kalki, RRR, Pathaan) may survive higher prices. Smaller Hindi, Tamil or Malayalam releases would simply lose screens.

Festival runs shrink: Indie Indian films chasing Oscars or festival buzz could skip US qualifying runs if costs balloon.

Workarounds multiply: Producers may try structuring films as co-productions with US post-production or financing, arguing 'made in America' status. That’s risky until rules are clarified.

Streaming: the bigger time-bomb

Right now, streaming is shielded by the WTO moratorium. But that expires in 2026 unless renewed.

If Washington, or any other government, decides to levy digital customs duties after that, OTT economics change overnight. Netflix, Amazon and Disney could start paying a surcharge on importing Indian content, which would:

• Push them to renegotiate Indian licensing at lower prices.
• Reduce exposure for Indian titles in US catalogs.
• Ultimately cut into producers’ bottom lines.

India’s film industry backdrop

According to EY–FICCI, India’s film segment shrank 5 percent in 2024 to Rs 187 billion, despite over 1,600 releases. With broadcasters and OTT platforms tightening profitability, every external market matters. Losing pricing power in North America would sting at a vulnerable time.

What this really means for Bollywood and Tollywood

If you’re a studio head in Hyderabad or Mumbai, Trump’s post isn’t just American campaign bluster. It’s a warning shot that foreign content is back in the firing line of US politics.

For Indian cinema, the US market isn’t optional. It’s where tentpoles find prestige, diaspora strength, and double-digit revenue share. A 100 percent tariff, even if unlikely to stick, forces everyone to rethink pricing, risk, and strategy.

The bigger cliff is 2026. If the WTO’s digital tariff shield drops, the fight over streaming rights will be even more consequential than theatre tickets.

Watching a Shah Rukh Khan thriller or a Prabhas sci-fi epic in an American multiplex has become routine for Indian diaspora families. Trump’s tariff threat throws a wrench into that experience.