Ever since Donald Trump returned to office, he has been shaking up every industry—left, right, and center—creating widespread panic. And now, he has dropped a massive bomb on the movie industry.
Trump announced that he is issuing an immediate order to the United States Trade Representative and the Department of Commerce to begin the process of instituting a 100% tariff on all foreign films entering the U.S.
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This is nothing short of a devastating blow for Indian cinema, particularly to Telugu distributors in the U.S.
So far, there has been no tax to screen a Telugu or any foreign film in the U.S. But now, this is like dropping a bomb on the industry.
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In simple terms, if a distributor in the U.S. buys a Telugu film for $1 million, they would now have to pay an additional 100% tax on that amount. This means the cost to screen the film doubles to $2 million. For U.S. distributors, this makes the entire model financially disastrous.
What’s even scarier is that Trump emphasized the “immediate effect” of this policy.
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That’s already sending shockwaves through the Telugu film distribution circuit in the U.S.
There’s no clarity yet on what happens to films that are already bought and scheduled for release—say, for example, a film hitting theaters this coming Thursday. These films were acquired at pre-tariff prices, and if this new tax is enforced immediately, there’s no way the distributor can recover their investment.
This uncertainty is sure to cause massive confusion and panic among distributors and production houses alike.
Any ongoing deals for upcoming Telugu films in the U.S. are now in complete limbo.
With no clear guidance on how this sudden 100% tax policy will be enforced, distributors would be frozen.
If a film is bought for ₹1 crore, they now have to shell out another ₹1 crore just in tax — instantly doubling the cost to ₹2 crore. This isn’t just unsustainable — it’s a death blow. In a market already hanging by a thread, this could wipe out the entire ecosystem overnight.
And the impact doesn’t end there. This policy may also affect OTT platforms like Netflix and Amazon Prime Video. If they stream a Telugu film in the U.S., will the 100% tax apply to them too? That’s still unclear. If OTT giants are also forced to pay the tax, they might rethink acquiring Indian films for higher prices. This is another blow!
This decision has the potential to cripple the U.S. distribution market for Indian films, especially Telugu cinema.
Not just the distributors, but production houses in India that rely heavily on revenue from overseas markets will be hit hard.
The only possible hope at this point is that major Hollywood studios step in and negotiate with Trump.
Because in reality, foreign films don’t earn as much in the U.S. as Hollywood films make in international markets.
If countries like China and India respond by imposing similar tariffs on Hollywood films, it could seriously damage the U.S. film industry globally.
In this situation, China is the only country with the leverage to challenge Trump and possibly push him to reconsider or roll back his absurd 100% tax proposal.
For now, we wait and watch. But one thing is certain: Trump has just dropped a nuclear-level disruption in the Indian film business in the U.S. market.
