Morgan Stanley notes that last night, President Trump posted on social media an announcement of 100% tariffs on all movies coming into the U.S. produced in “Foreign Lands.” In the bear case, this likely reduces the earnings power of all companies in the value chain, the firm says, adding that 100% tariffs on some or all of the cost of a film would lead to fewer films, more expensive films, and lower earnings for all in the business. Morgan Stanley further points out that the reality is that for any given film, there can be writing, production, editing, post-production, visual effects–all done in different countries. Retaliatory tariffs are an additional risk–it might give foreign governments an incentive to tax or block U.S. streaming services and/or film releases, the firm argues. The firm notes that equities that would be negatively impacted from tariffs on film and TV production include Netflix (NFLX), Disney (DIS), Lionsgate (LION), and Cinemark (CNK), Warner Bros. Discover (WBD), Comcast (CMCSK) (CMCSA), Paramount (PARA), Fox (FOXA), Roku (ROKU), and AMC Networks (AMCX).

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Netflix’s Hold Rating Amid Potential Tariff Impacts and Strategic Mitigation Strategic Growth and Revenue Expansion Position Netflix for Success: A Buy Rating Analysis Citi sees 20% earnings hit to Netflix under ‘worst-case’ tariffs Movie studio stocks slide after Trump proposes new foreign film tariff Trump Strikes Movie Stocks With a ‘Knock-Out Blow’

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