If Trump follows through with his threat, it would mark the first time he’s essentially imposed a tariff on a service rather than a good.

The state, meanwhile, has proposed and put in effect many tax incentives, as have other American cities.

Hollywood was completely caught off guard when Trump first previewed the tariff in May.

“But in reality, he has no jurisdiction to do this and it’s too complex to enforce.”

American actors and directors generally prefer to work close to home.

“The reality is, it’s more cost-effective for Hollywood studios to fly crews internationally and cover their accommodation expenses, due to lower labor costs, fewer rebates, and overall cheaper production overseas,” Jay Sures, vice chairman of United Talent Agency, shared with CNN in May.

Netflix shares dipped by 1% on Monday morning following Trump’s announcement, whereas other film-related companies such as AMC and The Walt Disney Company saw an increase in their stock values.

While Hollywood remains robust, there’s a notable decline in US cinema ticket sales as fewer major films are being released post-pandemic, with audiences increasingly opting to stream movies at home.

In 2018, US box office earnings reached nearly $12 billion but plummeted to just over $2 billion in 2020 when many cinemas were closed due to the pandemic. Although there has been a recovery, the number of film releases is still around half of what it was in 2019, and annual domestic box office earnings haven’t surpassed $9 billion since then.

This year, Warner Bros Discovery, CNN’s former parent company, has achieved $4 billion in global box office revenue, making it the first studio to reach this milestone.

More tariffs in the works

Beyond films, Trump is readying up a slew of other tariffs.

In a separate social media post on Monday, Trump said he plans to impose a “substantial” tariff on all furniture imported into the United States.