'Tollywood Has to Wait to Gauge Impact Of Trump Tariffs'

He notes that U.S. states currently impose a tax of around 7% on each ticket sold for Telugu films, and if this tax is increased to 100%, the total could effectively rise to 14%. “That would still be logical, though it is indeed burdensome,” he adds. “It would allow producers and U.S. distributors to clearly understand how much the U.S. is taking and what remains for us and make adjustments across the value chain.” “This is akin to the erstwhile system in Telugu states where straight Telugu films used to have one tax slab while dubbed films and foreign films used to have a higher tax slabs.” He added.

However, Rajkumar is more apprehensive about a 100% tariff being applied to the Declared Import Value of a film as being speculated in some quarters. “This is another form of taxation in the U.S., levied directly on the procurement cost. If a U.S. distributor acquires a film for ₹10 crore, the tax under the proposed tariff would be ₹10 crore, totaling ₹20 crore altogether. That would be irrational and too heavy a burden,” he explains.

He also warns of potential abuse in the valuation process. “With no independent agency to verify the authenticity of declared values, authorities might just go by the agreement figures. That opens the door for manipulation—either inflating or deflating values. If the declared value is increased, it would affect ticket pricing, ultimately hurting the consumer. This wouldn’t be viable for filmmakers.”

Rajkumar also points out that even Hollywood is uncertain about the implications of the new policy. “Hollywood films earn about 35% of their revenue from the U.S., while the remaining 65% comes from International territories including Europe, Asia, Africa, and other regions. If those countries begin to impose reciprocal tariffs, it could significantly hurt Hollywood’s global earnings.”

He concludes, “Right now, the situation remains fluid. We’ll have to wait for more details to emerge in the coming days.”