US President Donald Trump’s dramatic tariffs, created to allegedly restore the strength of the American industry, may have the opposite effect in one of the country’s most powerful areas: media and entertainment.

Tariffs will harm America’s film industry

Although the announced tariffs harm companies that sell goods, specialists say it could cause an economic recession that would lead to lower advertising spending by companies and, therefore, less consumption of media and entertainment.

They also harm Hollywood on the supply side, because studios buy goods like lumber from Canada to build sets, as well as steel, wardrobe and specialized lights and microphones from other countries. Gift items made in China, like the $90 Stranger Things sherpa jacket, may now become more expensive.

This week, Trump announced he would talk to Hollywood executives and may hit foreign films with 100% tariffs. That could cause a hit back from other countries by raising tariffs on Hollywood movies abroad, which could harm the entertainment industry even more.

China is a second problem. For decades, Hollywood has tried to increase its market share in China, a country with 1.4 billion potential consumers and the second-largest movie industry in the world. The expiration of the US–China Film Agreement in 2017, which guaranteed only 34 US films per year in China, didn’t help studios increase their profits. Trump’s trade war with China had already begun in his first term. As an indirect result, only one Hollywood movie topped $200 million in China in 2019, while Chinese film Ne Zha 2 generated $1 billion domestically and another billion overseas. With the escalation of tensions between the two countries, the Chinese government retaliated by restricting the number of Hollywood films.

Trump’s administration may last only four years, and the next government can reverse his tariffs. But there’s more serious long-term harm for the entertainment industry: the erosion of Hollywood soft power — the ability to seduce, rather than coerce, shaping the preferences of the world. For decades, American administrations made strategic alliances with movie studios to reach their goals abroad. Walt Disney produced a series of animations and characters, like Zé Carioca, as government efforts to keep Latin America close to US demands of goods and commodities during World War II. When US President Ronald Reagan watched First Blood Part II during his presidency, he said, “Boy, after seeing Rambo last night, I know what to do next time this [hostage crisis] happens.” US President George W. Bush was so pleased with Universal Pictures’ United 93 that he hosted a special screening at the White House for families and crew. Experts said the script was almost completely faithful to the 9/11 Commission Report.

American film could lose ground

Soft power is about perception. Hollywood’s soft power was built over decades, and it made the American movie industry the most profitable in the world. It also strengthened the worldwide perception that the Academy Award is the most prestigious film festival in the world, even though it historically favors Hollywood films in the most important categories. But perception can shift under political influence.

The Canadian government is requiring mandatory labeling of products sold in the country with their origin, stating the address of the foreign manufacturer and the address of the Canadian company that imported them. The European Union is threatening to impose tariffs on over 400 US products and 1,300 items with steep import taxes. This may affect US entertainment products. If perception changes, international audiences may choose to buy domestic tickets in multiplexes instead of Hollywood’s. When Paul Greengrass’s United 93 and Kathryn Bigelow’s The Hurt Locker were released, most international audiences saw the US as a victim of terrible attacks. But now, with Trump raising more domestic and commercial barriers, those kinds of movies may not enjoy the same favorable perception abroad.

Instead, Hollywood movies that may succeed internationally are those that go against Trump’s ideal of a great nation. Alex Garland’s A24 film Civil War (2024) shows a despotic federal government and secessionist movements in a broken, authoritarian US. Garland’s new release, Warfare (2025), shows soldiers’ fragility in a claustrophobic apartment surrounded by al-Qaeda, rather than romanticizing their mission in Iraq. But those productions may become less frequent during Trump’s second term. Economic recession and federal government threats against dissent may force studios to choose safer projects, like successful franchises or remakes. Also, some tech companies whose CEOs stood behind Trump’s inauguration speech are now forming a new oligopoly in Hollywood, changing the traditional movie industry.

The international trade war may be the perfect political setting to boost domestic entertainment industries. This month, the Brazilian National Congress approved a report on regulating streaming services. It proposes mandatory payments of Condecine (Contribution for the Development of the National Movie Industry) by platforms, requires quotas for national products and mandates that platforms invest 10% of their gross revenue in national productions. Advisors recommend passing the regulation “as fast as possible.”

One studio executive said, “I can see all of this animosity toward the US increasing the likelihood of greater local content spend requirements for streaming.”

In the 1990s, after the US won the Cold War, high-budget blockbusters like Saving Private Ryan and Titanic showed Hollywood’s power abroad. Still, in 1995, Danish filmmakers Lars von Trier and Thomas Vinterberg created the Dogme 95 movement to “take back power for directors as artists” in opposition to studio control. Now, with Trump making prejudicial remarks against foreign nations and confronting the Supreme Court by expelling legal immigrants, Hollywood may take a long-term hit. With less money and weaker global acceptance of American heroes and dreams, the foreign film industry may finally win the hearts and minds of the world.

The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.