Donald trump has caused global alarm by upending every industry, left and right, since he took office again. He has since delivered a huge bombshell on the film industry. trump declared that he is giving the US Trade Representative and the Department of Commerce an urgent directive to start the process of imposing a 100% tariff on any foreign films that are brought into the country.
 
For telugu distributors in the united states in particular, this is a catastrophic blow to indian cinema.  As of right now, there is no tax associated with showing a telugu or international film in the United States.  This is like dropping a bomb on the industry today, though.

To put it simply, a distributor in the united states who purchases a telugu film for $1 million would now be required to pay an extra 100% tax on that sum.  This implies that the movie's screening expenses will quadruple to $2 million.  This renders the entire strategy financially ruinous for distributors in the United States.  The fact that trump highlighted the "immediate effect" of this policy is even more concerning. 

The telugu film distribution industry in the united states is already seeing the effects of that.  What happens to movies that have already been purchased and are set to be released—for instance, a movie that opens in cinemas this Thursday—is still unclear.  The distributor won't be able to recoup their investment if the new tax is implemented right away because these movies were purchased at pre-tariff prices.  Both production companies and distributors will undoubtedly get extremely confused and panicked as a result of this uncertainty. There is currently total uncertainty around any pending agreements for telugu movies in the United States. 

Distributors would be frozen if there was no clear information on how this abrupt 100% tax policy would be implemented.  A movie that costs ₹1 crore now has to be paid an additional ₹1 crore in taxes, which quickly doubles the price to ₹2 crore.  This is a death blow in addition to being unsustainable.  This has the potential to completely destroy the ecosystem in a market that is already struggling.  And the effects don't stop there.  OTT services like Netflix and amazon Prime Video may also be impacted by this rule.  Will they also be subject to the 100% tax if they stream a telugu movie in the United States?  It's still unclear. 

OTT behemoths may reconsider paying more for indian films if they are also required to pay the tax.  Another blow!  The U.S. distribution industry for indian films, particularly telugu films, could be severely damaged by this decision.  Production companies in india that mostly depend on sales from foreign markets will also be severely impacted, in addition to distributors.  At this point, the only hope is for the hollywood studios to intervene and engage in negotiations with Trump.  Because, in actuality, hollywood films make more money in overseas markets than foreign films do in the United States. 

The worldwide U.S. film industry might suffer significant harm if nations like china and india retaliate by placing comparable taxes on hollywood productions.  China is the only nation with the power to oppose trump in this case and perhaps pressure him to change his ridiculous 100% tax plan.  We watch and wait for now.  However, there is no denying that trump has just caused a massive upheaval in the indian film industry in the American market. 

 
For more interesting updates wa click and follow Indiaherald WhatsApp channel

Find out more:

G GOWTHAM

05/05/2025 10:33 AM