Baek Byung-yeul is a journalist at The Korea Times focused on cultural content, including films and cultural events in South Korea. You can contact him at baekby@koreatimes.co.kr to share your insights.
Korean content industry on alert as Trump eyes 100% tariff on foreign films
U.S. President Donald Trump speaks during a joint press conference with Israeli Prime Minister Benjamin Netanyahu at the White House in Washington, D.C., Monday (local time). Reuters-Yonhap
By Baek Byung-yeul
Details, legal issues of levy plan remain unclear
U.S. President Donald Trump's plans to impose a 100 percent tariff on movies made outside his country could, if realized, significantly threaten the thriving Korean content industry, which is heavily reliant on global streaming platforms, industry experts said Tuesday.
Kim Dae-jong, a professor of business administration at Sejong University, said the actual implementation of a 100 percent tariff on foreign films and content "is highly likely to violate World Trade Organization (WTO) rules, and diplomatic friction with allies is inevitable."
He said, "Currently, Korean content is distributed globally through streaming platforms like Netflix, Disney and Amazon. As Korean dramas and films have a significant proportion of overseas exports and investment, they could be directly hit if the U.S. strengthens regulations.”
The professor warned that high tariffs or other trade restrictions could result in financial losses for Korean content companies and cause them to cut back on spending and new projects.
“It is more reasonable to view the impact as a slowdown in growth rather than a complete collapse, as Korean content has already diversified its markets to Asia, Europe and the Middle East,” he said.
On Monday (local time), Trump reiterated his stance, asserting that the U.S. movie-making business has been "stolen" by other countries. This is not the first time Trump has voiced plans to tax film imports, as he previously said in May that he had instructed the commerce department to prepare for a 100 percent tariff on foreign movies.
"Our movie making business has been stolen from the United States of America, by other Countries, just like stealing 'candy from a baby.' 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,” the president said on social media.
Cast and crew shoot a drama in Changwon, South Gyeongsang Province, May, 1, 2022. Courtesy of South Gyeongsang Provincial Government
However, the practical details and legal reasoning behind the proposal are still murky. Movies and TV shows are usually transmitted digitally rather than imported physically, making it a challenge to figure out how to apply a tariff. Also, no one knows what specific law or rule Trump would use to actually enforce the new tax.
An industry expert here expressed doubt about the plan's feasibility, given the industry’s complex structure.
"Since specific details have not yet been released, we will have to wait and see. However, I question whether his plan is realistic. The content industry, such as films and dramas, is highly subdivided in its production structure. It's not a case of completing work in one place and then distributing the content,” an official from a local marketing company said on condition of anonymity.
"We don't know anything yet, such as whether a film shot overseas but edited in the U.S. would be considered an imported film. However, if his plan is realized, I anticipate that the domestic content industry will not be immune to a hit.”
Ultimately, experts like Kim think that Korea will need to adjust its plans for the creative industries.
“The government and the industry need to accelerate diversification strategies by reducing reliance on the U.S. market. They also need to boost the competitiveness of the country’s domestic streaming platforms and mitigate risks by expanding production hubs within the U.S. through co-productions and joint ventures,” Kim said, emphasizing that engaging content and a loyal global fandom are the greatest assets of the Korean content industry.