Insights 
VT 
Former President Trump plans to impose a 100% tariff on foreign-produced movies entering the United States. He claims this is a response to incentives by other countries to lure American filmmakers, which he sees as a threat to national security and the domestic industry.
The Department of Commerce and the U.S. Trade Representative are tasked with initiating the tariff process. This may affect the economics of the entertainment industry, international relations, and stock values of media and film production companies.
Impact on Companies
Companies involved in international film production may face increased costs and potential revenue losses. In contrast, domestic studios might benefit from reduced foreign competition.
The announcement raises questions about the policy’s specifics, such as the treatment of films partially produced abroad. Uncertainty also surrounds whether international TV series and streaming content will fall under the tariff.
This proposed tariff stems from discussions at Mar-a-Lago with actors like Jon Voight and Mel Gibson, focusing on declining U.S. entertainment jobs. The tariff may aim to shift production back to the U.S.
Ongoing scrutiny and debate over the tariff’s details should be expected, and responses from major media and streaming companies with international interests are anticipated. The policy could change global media market dynamics.
Proposed Policy Details
What we’ve seen laid out so far is a proposed policy with direct, measurable intent: to penalise foreign-manufactured films entering the U.S. with a 100% tariff, apparently in retaliation against what’s described as overseas government incentives drawing production away from American soil. The rationale behind the move hinges on two primary points—economic defence and national security—woven together with concern over domestic job losses in the entertainment sector.
Based on current details, the policy process shifts into the domain of the U.S. Department of Commerce and USTR, meaning formal steps are now likely underway. Given their standard procedures, any tariff resulting from this will not materialise instantly. There’s typically a multi-stage inquiry, followed by hearings and consultations, which could span weeks or months. Derivatives markets tied to entertainment equities, therefore, are looking at a trading window characterised by headline risk rather than hard figures.
Studios managing asset portfolios across borders now face mounting questions. Those with stakes in companies that rely on international co-productions or licensing may see short-term volatility, particularly if investors begin pricing in weaker international revenue. Stock options in companies with extensive overseas pipelines could reflect increased delta and vega sensitivity as uncertainty over costs grows.
From our side, this opens an opportunity to scrutinise exposures more precisely. Where implied volatility begins to diverge sharply from realised in film-related equities or broader media baskets, it makes sense to reweight accordingly or consider calendar spreads where expiration cycles might capture announcement timelines. For those with directional bias, it’s also possible that premiums become attractive for protective puts as regulatory suspense continues.
Notably, this measure goes beyond old narratives around trade imbalances—it targets culture as a commodity. That’s where market interpretation may split. While S&P 500 constituents with limited exposure may adjust only modestly, index-linked derivatives could still experience stress through correlated sentiment shifts, especially if perceived as a barrier precedent for other creative industries. It’s not just about action; it’s about sentiment propagation.
How international streaming platforms are categorised under the policy could swing implied correlation expectations amongst media conglomerates. If series titles produced between locations or with multinational crews qualify for tariffs, pricing assumptions for content origin could shift. We shouldn’t overlook the mechanical implications of policy definition on benchmark media indices. Particle changes lead to collective repricing.
Voight and Gibson, mentioned as present during the discussions, are moving from actors to actors in policy. That shift influences perception just as much as statements do. If the market starts reading this as the beginning of cultural trade alignment rather than a one-off gesture, longer-dated options on affected ETFs might begin to widen spreads. Historical correlations may become less applicable as global narratives become fragmented by regulatory shifts.
As always, clarity is going to come in pieces. We watch for rate changes in media speculation volume and increased sensitivity to public comments from congressional or committee members tied to trade oversight. This type of noise historically drives short-term momentum plays but also creates space for mispricing.
In terms of positioning, we advocate watching where term structure flattens or steepens in contract expiration schedules—this will show where risk concentration is moving. Volatility buyers may step in if perceived ambiguity persists longer than expected. Until then, we treat headlines as directional cues, not trigger points. Options that expire near key procedural deadlines become informational assets just as much as instruments.
