Hollywood Tariff Push Sparked By Trump-Jon Voight Meeting, Where Actor Proposed Levies In 'Certain Limited Circumstances' - Netflix (NASDAQ:NFLX), Walt Disney (NYSE:DIS)

President Donald Trump‘s decision to levy a 100% tariff on foreign films resulted from a proposal by actor Jon Voight and his manager, Steven Paul.

What Happened: Voight and his manager had a meeting with Trump and they submitted a “comprehensive plan”, following which, the president declared on Truth Social that he was directing the Commerce Department and the U.S. Trade Representative to “immediately begin the process of instituting a 100% Tariff on any and all Movies coming into our Country that are produced in Foreign Lands,” as per a report on CNBC.

Voight, designated by Trump as a “special ambassador” to Hollywood, expressed optimism about collaborating with the administration, streamers, studios, and unions to form a plan to strengthen the American film industry.

The proposal put forward by Voight and his manager, Steven Paul, featured federal tax incentives, revisions to tax codes, co-production agreements with foreign nations, and infrastructure subsidies for theater owners and production companies.

Voight stated, “…we can ensure that American production companies thrive, more jobs stay here at home, and Hollywood once again leads the world in creativity and innovation.”

Paul's company, SP Global Media, stated, "The proposal also includes a focus on job training, and tariffs in certain limited circumstances."

Why It Matters: Trump’s proposed tariffs have caused a stir in the film industry and among investors. This announcement led to a temporary drop in share prices for companies like Walt Disney Co. DIS and Netflix Inc. NFLX. However, Trump as well as the White House later clarified that the tariffs were not guaranteed to be adopted.

Economist Peter Schiff criticized the proposed tariff, suggesting that it would be a new kind of federal excise tax on Americans who watch movies filmed abroad, and that Netflix subscribers would ultimately bear the cost.

Trump’s move is seen as a threat to the “dying” movie industry, as he aims to bring back movie production to America. However, the President later clarified that he would speak to the Hollywood studios seeking their feedback and told reporters, "I'm not looking to hurt the industry, I want to help the industry,"

Meanwhile, California Governor Newsom’s spokesperson stated, "If the President announces a proposal with more details, we will review it."

Trump’s proposal and its potential impact on the film industry and streaming services continue to be a topic of heated discussion.

The shares of Netflix dropped 1.94%, while those of Disney slipped 0.4%, following the news on Monday.