Answerman

How Will President Trump's Proposed Foreign Film Tariff Affect Anime?

Readers ask:

“Many, many people are asking how Donald Trump's announcement that America will impose a 100% 'tariff' on movies 'produced in foreign lands' will affect anime. How will this work?”

Let's get straight into it and break this down.

First off, what has happened? Here's a quick timeline.

President Trump's Truth Social post justified the implementation of a 100% tariff on “any and all movies” coming into the United States that are “produced in Foreign Lands.” The President claims the justification for this punitive move is “Other Countries” offering “all sorts of incentives to draw our [American] filmmakers and studios away from the United States.” The President believes that “there is a concerted effort by other Nations, and therefore, a National security threat.”

According to Reuters, “U.S. President Donald Trump on Sunday announced a 100% tariff on movies produced outside the country, saying the American movie industry was dying a 'very fast death' due to the incentives that other countries were offering to lure filmmakers…”

The article goes on to report that the President wrote, "This is a concerted effort by other Nations and, therefore, a National Security threat. It is, in addition to everything else, messaging and propaganda…"

It is important to highlight the whole quote because the President is citing a national security threat, and it is necessary for him to use his executive powers to order emergency tariff measures without passing new legislation, which requires passing a new bill through Congress. This is important, and we will circle back to it later.

The good news is that less than 24 hours later, the Hollywood Reporter reported that the White House has issued a “clarifying statement” that “no final decisions on foreign film tariffs have been made.”

This is a rapidly developing story, and as such, a lot of what we learned on Sunday evening has changed as of Wednesday morning. The President's Truth Social post happened after he had met with his “Hollywood Ambassador,” actor (and father of Angelina Jolie), Jon Voight, who is the author of a seven-point plan he has called the “Make Hollywood Great Again” proposal.

Section 3 of the document covers tariffs designed to disincentivize American productions from filming overseas to benefit from foreign tax incentives. Voight proposes that these filmmakers will be punished with a 120% tariff that “will be placed on that production equal to 120% of the value of the foreign incentive received.” Needless to say, this will cripple most of those big offshored studio productions. But! The document does not mention a 100% tariff on foreign-made film. There is nothing in Voight's plan that involves imposing a flat tariff on French arthouse movies, K-Dramas, or anime. The tariffs appear to be designed solely to punish American productions that move abroad, not local distributors who import foreign film and television content.

One could rightly argue that the way to retaliate in kind is to boost tax credit schemes within the United States on top of some of the local state government-sponsored subsidies being offered to filmmakers. As of Wednesday, this does seem to be the potential direction of traffic, and while it is impossible to predict what the final plan will be, make no mistake that a blanket tariff applied to all film and television content produced entirely in “Foreign Lands” like Japan, Korea, and China, will have an extremely negative impact on anime.

In addition to the tariffs, removing the “de minimis exemption,” which allowed duty-free importation of small packages valued under US$800 from China and Hong Kong into the United States, has sent a shudder through the anime collectibles and hobbyist retail industry. Japanese sellers and domestic importers alike rely on reliable international logistics and tax-exempt thresholds. Consumers tend to buy less when they don't know if they are liable to pay customs duty on things they buy online. This doesn't just impact American fans. When America sneezes, the rest of the world catches a cold. And now they're coming for our anime!

We recently discussed the impact tariffs could have on manga imports and anime collectibles, such as figurines manufactured in China and other Asian countries. That threat diminished for a while until it didn't, and today, we live in a world where 145% tariffs have been imposed on goods manufactured in China, and Japanese firms like Good Smile Company have announced that they will temporarily “pause” pre-orders to U.S.-based customers. In addition, local sellers have also taken similar action, including BuyAnime.com removing purchase options from all items that aren't currently in stock.

How would a 100% tariff on all foreign-made film and television work?

If this proposed 100% tariff was to affect all foreign film and TV, not just American productions filmed overseas, how might it work, and who would pay for it? Unlike the Banpresto One Piece figurine you want to pick up in your local Hot Topic, where the consumer will pay for that tariff in the form of a higher retail price, there are several different ways a tariff can be collected on a foreign film.

In the case of anime movies, Japan produces them and then licenses out the distribution rights to overseas partners like Sony Pictures, Crunchyroll, and GKIDS. Those companies offer an up-front minimum guarantee, or “MG” for short, and they also agree to share a percentage of future profits they earn from monetizing the movie, including home video and streaming. The MG payment is also known as an advance or license fee. It's an easy thing to implement a tariff on. If the distributor agrees to pay an MG of $1M for the distribution rights, they now have to pay the U.S. government a $1M tariff on top. The cost of licensing anime will now be twice as expensive as it was yesterday.

On top of the MG, the distributor will also share the “net revenue” they earn from the box office (“ticket sales”). In this instance, net revenue is what is left after the theatrical exhibitor (AMC Theatres, Regal, etc.) deducts 30-40% of the ticket price, 20% is paid in local taxes, and the print and advertising (“P&A) costs are deducted. Once the distributor has earned back the initial MG payment they are in “overages,” and that's when the royalty payments to the producer kick in.

Generally! With anime film licensing, the distributor agrees to give the producer 50% of box office net revenues. If a 100% tariff were slapped on this income as well, the distributor would be paying everything they have earned to the producer and earning nothing. They'd probably make a loss. Therefore! Japanese producers will have to reduce their revenue share percentage. This means they will earn less, which means the entire Japanese anime film-making industry will have to revise down their anticipated overseas earnings because the U.S. generates more than 41% of all overseas streaming rights revenue. This will result in less investment in anime films and, ultimately, fewer anime films being made. Heck! Even without these tariffs being implemented, there is more uncertainty, and nobody invests during times of uncertainty.

What the threat of this tariff could result in is fewer anime being licensed by U.S.-based companies during the current Administration. This will impact fans in the rest of the world, especially English-speaking ones because we generally rely on the U.S. distributor to finance the localization costs, and then the smaller English-speaking territories part subsidize this expense to access those assets for the UK and Australian release.

Another way tariffs of this kind could impact anime is in production. Perhaps we will see some of the larger and wealthier anime production companies like Aniplex, Toei, or TOHO, who have been on an acquisition spree of late, purchase a U.S.-based 2D animation studio like Austin's Powerhouse Animation, or LA's Titmouse, Inc. Both have extensive experience working within the Asian 2D animation production pipeline. It could be a smart strategic move if these tariffs stick. In one fell swoop, these U.S.-imposed tariffs could transform the very definition of what anime is. It's easy to forget that Japan has a production capacity problem, with their number of domestic animators expected to decline even further over the next few years. Japan will start expanding its international production pipeline beyond Korea and China.

I believe that the U.S. market is too large and far too lucrative for Japan to step away from it, so what else might we see occur in response to these unprecedented tariffs? We should expect the Japanese government to engage with the U.S. Administration over this issue. I doubt the President of the United States is an anime fan, but he's a fan of money, and Japan's anime industry is projected to generate over US$30 billion in revenue this year, with over 60% coming from overseas income. The global anime market is forecasted to reach US$73 billion by 2032, and anime will be included in any reciprocal trade agreement discussions.

We may also see Japan shift its focus to markets outside the United States, including Mexico, Brazil, the Middle East, and Europe. At least for the next 3-4 years.

When things become so uncertain, it is often the best strategy to adopt a “wait and see” approach. Anime producers could just delay their next tranche of projects by six months or so if making a series. The average production lead time from pre-production to production, post, and delivery is 24-36 months, believe it or not, and that's before you factor in the localization of all of the assets and the creation of marketing materials. Movies take even longer. Anything from 3-7 years. We have three and a half years left to run on this presidency, which ends just before the beginning of the Winter 2029 season. And, of course, we'd all be hoping that the incumbent Administration removes the tariffs entirely.

Are films and television exempt from tariffs?

Perhaps I am getting ahead of myself. The fact of the matter is this. The “International Emergency Economic Powers Act” (IEEPA) allows the President to address an “unusual and extraordinary threat that warrants a national emergency declaration by imposing economic sanctions on a foreign state, such as tariffs, cannot be used against films.” The “50 USC 1702: Presidential Authorities” text containing these laws and exemptions came into effect on May 2, 2025. Exempt from the Code is “any format or medium of transmission, of any information or informational materials, including but not limited to, publications, films, posters, phonograph records, photographs, microfilms, microfiche, tapes, compact disks, CD ROMs, artworks, and news wire feeds." The President does not have the power to place tariffs on films or any other type of physical or digital media that transports intellectual property.

According to lawyers Kenneth J. Nunnenkamp, Moshe Klein, and Eli Rymland-Kelly, "The Berman Amendment, which is part of the International Emergency Economic Powers Act (IEEPA) and the Trade and Economic Cooperation Act (TWEA), generally protects services that involve the import or export of information and informational materials. Specifically, the Berman Amendment, as revised by the Free Trade in Ideas Act, clarifies that the President's emergency sanction powers cannot be used to regulate or prohibit the exchange of any information or informational materials, regardless of their format or medium.”

Tariffs were never intended to be used against “services” or “intellectual property” (IP). The American film and television industry is one sector of the economy that runs a surplus when it comes to international trade. So! It blows my mind that tariffs are even being discussed when it comes to film. Declaring tariffs on foreign-made films sets a very dangerous precedent for the United States economy. Why? The USA operates one of the largest service-based economies on earth. If America's international trade partners define these proposed tariffs as a tariff on services and intellectual property, things could become very messy. The Berman Amendment deliberately exempts books, records, films, and any type of media that stores and transports IP either physically or digitally. Movies are a service, and the purpose of the Berman Amendment is to protect what has become the larger Service Industry sector of the economy that contributes over 74% of GDP annually, and it employs more American workers than the manufacturing sector.

If the new front in the trade war were to open up on the service sector, we could see retaliatory tariffs levied on all manner of companies, including medical imaging firms, software and information technology companies, and American consulting firms like Bain & Company, McKinsey and Company, and Boston Consulting Group. This is one of the fastest-growing sectors of the economy, generating over US$59 billion in 2024 and is estimated to generate over US$82.8 billion by 2029, according to GlobeNewswire.

I hope that cooler heads will prevail and that film and media's status as exempt services will preclude any decision to impose economic sanctions on film and television content that is produced outside of the United States. I hope that those companies I have mentioned above continue to hope for the best and plan for the worst. Make no mistake, the amount of uncertainty and nervousness these announcements create will only mean bad things for the future planning and investment in project “Make Anime Great Again.”

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