US President Donald Trump continues to drop one shocker after the other. If the last weekend was about his tariff for H-1B Visas, Trump’s latest announcement is regarding the cinema industry. On Monday (September 29), he announced a 100 percent tariff on films that are not being produced in the United States of America. Therefore, any major film produced outside the country will need to pay 100 percent duty if they are to release their films in the country. While this move invariably is a huge blow for English films produced outside USA, Indian cinema is also set to get affected in a big way.

“Our movie-making business has been stolen from the United States of America, by other Countries, just like stealing “candy from a baby.” remarked Trump through a post on his social networking site Truth Social.

“California, with its weak and incompetent Governor, has been particularly hard hit! Therefore, in order to solve this long time, never ending problem, I will be imposing a 100% Tariff on any and all movies that are made outside of the United States. Thank you for your attention to this matter. MAKE AMERICA GREAT AGAIN! President DJT”

Dominance of USA market in Indian cinema

With a huge number of Indians residing in USA and Canada, North America is a huge market for Indian films when it comes to the worldwide box office. Till the early 2000s, Indian films largely relied on the USA and UK markets for overseas collections with Gulf being the other major contributor. Over the last decade or so, there have been a lot more markets that have opened up for Indian films, thereby swelling the box office potential across the globe. However, USA still remains a huge market in terms of contribution percentage, especially for Bollywood and Tollywood films.

How big is USA’s contribution for Hindi and Telugu films?

Very big! In fact, a significant chunk of their overseas collections come from USA. For instance, Pawan Kalyan’s latest release They Call Him OG grossed Rs 48 crore overseas in its first two days including premieres. Of this, approximately Rs 37 crore came from USA alone. Rajinikanth’s recent release Coolie grossed over $20 million from overseas territories with USA contributing more than 35 percent of that revenue. The story is same with Bollywood where USA has historically been a big money-spinning region for its film. With the industry in general facing drought in successful films, this Trump update only compounds its misery.

This year’s biggest Bollywood hit, Chhaava, managed to breach the $10 million mark overseas, of which $6.41 million came from the USA-Canada market. The highest-grossing Indian film in USA is Bahubali 2 which collected $20.57 million in 2017, showing the potential for Bollywood films in the region. Currently, a big event film featuring a superstar can do business upwards of $35 million if the content resonate with the audience. All that, though, will change once Trump’s cinema tariff rules fall into place.

What lies ahead?

The details of the 100 percent tariff aren’t out yet. While Trump has issued an official statement, only time will tell the entire dynamics of this tariff. One thing is for sure, the cinema industry in Europe and India are set to get affected. Budgeting of films and salaries of stars could take a beating, given that such a major chunk of overseas revenue could be pruned. It could also mean higher ticket rates for these films when they release in USA and it remains to be seen how much that affects viewership in theatres.