Raymond James claims that the entertainment industry’s most remote sectors may be affected by President Donald Trump’s planned tariff on foreign-produced films.
In a statement published Tuesday, Raymond James analyst Andrew Marok stated, “Although the focus is on movies for the time being, other forms of media like music, videogames, and web comics should not ignore developments.” “The commentary from the White House was focused entirely on the domestic film industry, but we could easily see the administration’s logic spreading to other forms of media like music, videogaming, and web comics given the global nature of content creation and consumption.”
Marok specifically mentioned the massive video game company Electronic Arts Inc. (EA), which runs several studios outside of the United States, including as E.A. Korea in South Korea, DICE in Sweden, and Codemasters in the United Kingdom. Raymond James asserts that although U.S.-based studios create the majority of E.A.’s tentpole titles, content development crosses national boundaries due to the complexity of game development. Take-Two Interactive Software Inc. (TTWO), a rival, also runs several studios abroad.
Take-Two Interactive’s stock was up 2.9% at the close of Tuesday’s trading session, while E.A. shares were down 0.1%.
Roblox Corp. (RBLX), an online gaming corporation, is another name in video games that may be affected. Although the company’s content production breakdown has not been provided, Raymond James points out that Roblox is a worldwide platform “in all aspects,” with 37% of sales and 79% of 2024 daily active users originating from countries other than the United States and Canada.
Raymond James claims that South Korea and Japan are the two biggest markets for Webtoon Entertainment Inc. (WBTN), a storytelling platform in the web-comics space. “While the company is emphasizing the U.S. as part of its growth strategy, Asian markets still account for the lion’s share of revenue,” said Marok.
Webtoon’s stock was down 4.3% at the close of Tuesday’s trading session, while Roblox’s stock was down 1.5%.
Trump called the American film industry “dying a very fast death” in a post on his Truth Social network on Sunday. He also gave the Department of Commerce and the U.S. trade representative the go-ahead to get started right away on imposing a 100% tariff “on any and all Movies coming into our Country that are produced in Foreign Lands.”
But according to Variety, a White House official stated on Monday that “no final decisions” have been made about foreign film tariffs and that every possibility is being considered.
Trump’s proposed levy on films made abroad has also drawn criticism for its constitutionality.
The president’s threat of a movie tariff was met with no immediate response from the Motion Picture Association. The MPA’s most recent economic impact study states that in 2023, Hollywood produced $22.6 billion in exports and a trade surplus of $15.3 billion.
