How will Trump's film tariffs impact Korean entertainment industry?

Director Bong Joon-ho, left, and actor Song Kang-ho hold the Palme d'Or trophy after their film "Parasite" won the top honor at the 72nd Cannes Film Festival in Cannes, France, in this 2019 photo. EPA-Yonhap

After U.S. President Donald Trump announced plans to impose a 100 percent tariff on all movies produced in foreign lands on May 4, aiming to revive "dying" Hollywood and save American jobs, the Korean entertainment industry is on a high alert over what challenges this possible move might bring to the K-content industry, which has been enjoying emerging global prominence through tie-ups with Netflix, Disney+ and major Hollywood studios.

Trump, even before the start of his second presidency, appointed three renowned actors — Jon Voight, Sylvester Stallone and Mel Gibson — as “Special Ambassadors” to revive Hollywood, which has lost much of its business to overseas markets over the past years.

There is widespread uncertainty about how such tariffs would actually be applied to films — especially since movies are different from physical goods and the rules for digital content and streaming platforms remain unclear.

Experts predict the impact on K-content will not be significant as Korea is neither a key production base nor a major filming location for Hollywood. However, there are shared concerns that the global expansion of Korean films could face setbacks.

According to the Korean Film Council (KOFIC), Trump’s tariff policy will have minimal impact on Korea’s film sector in short term, mainly because the U.S. make up a small share of total Korean film exports. In 2024, Korean films exported $41.93 million worth of completed works, with only $4.21 million, or 10 percent, going to the U.S. While the U.S. ranks as the third-biggest export recipient country, the overall scale remains relatively modest, KOFIC's Korean Film Industry Report noted.

"These days, Korean films have gained more recognition in the U.S. thanks to global streaming platforms, but their presence is about the same as that of arthouse films in Korea. Even if you add everything up, the market itself is quite small," said Yun Ha, director of KOFIC's Policy R&D Team.

"The primary effect of tariffs is to raise the price of goods so that people don’t buy them. But in reality, tariffs are imposed on goods, so films aren’t really subject to them. Even if tariffs were imposed on films, it’s unlikely that the ticket price would increase because of it — if at all."

Reduced opportunities for Korean films

Industry insiders say there is a high possibility that this could lead to fewer growth opportunities for Korean films and filmmakers in the medium to long term though, as ultimately, the U.S. is the world’s largest film market and serves as the key stage that determines global box office performance and critical reception.

“If a film succeeds at the U.S. box office or breaks into the American market, the brand value and marketing impact are enormous. At a time when Korean films are currently expanding somewhat through streaming platforms, this kind of development could be put a temporary, short-term hold on it,” Yun said.

"What worries me more is that this measure might be used politically as a bargaining chip to challenge the Korean government's support policies for its film industry."

The Motion Picture Association and other industry organizations of the U.S. raised objections to Korea's screen quota system and, in March, submitted comments to the U.S. Trade Representative (USTR) advocating for its reduction or removal.

This quota, established decades ago to shield domestic films from the dominance of Hollywood blockbusters, originally required theaters to show Korean movies for 146 days a year but was reduced to 73 days in 2006.

Developing Korea as entertech hub

To reduce future risks from tariffs, some in the industry suggest that Korea should develop itself as an entertainment technology (entertech) hub, focusing on advanced production, investment and distribution ecosystems, including virtual production, AI-driven editing, dubbing and cloud-based technologies.

"For Korea’s film and television sector, which has thrived on co-productions and exports to the U.S., Trump’s announcement is a wake-up call. The industry must reassess its reliance on American distribution and financing, taking proactive steps to minimize tariff-related risks," said Jung Han, CEO of the media outlet K EnterTech Hub and an adviser to U.S.-based Korean content streamer KOCOWA, operated by Wavve Americas.

He claims by embracing cutting-edge innovations, studios can reduce their dependency on location-based shooting and achieve greater efficiency. Whether Trump’s plan turns out to be a headline-grabbing gesture or a genuine policy shift, Han says the growing need for flexible, technology-driven production models is undeniable.

"Virtual production technology, for instance, enables filmmakers to create realistic backgrounds in the studio instead of traveling to real locations and AI-driven workflows can speed up previsualization, script breakdowns and post-production, making creative processes more flexible and less geographically constrained," Han explained.