Fears of deeper trade war drive investors to sell off shares in major US media companies
Warner Bros Discovery, Roku, Fox Corp and Disney have seen more than $16bn (£12.3bn) wiped off their valuations in the wake of US president Donald Trump’s international trade tariffs.
The TV and film industry has been assessing the impact of the tariffs on its operations since their introduction earlier this week, with physical goods – rather than services such as TV shows – most acutely affected.
That has not stopped Wall Street ditching US media shares, however, as investors prepare for the potential of higher domestic living costs and reduced spending capability, which could also affect streamer subscriptions and advertiser spending.
WBD saw its shares slide more than 13% to $9.16, lopping almost $3.4bn (£2.6bn) from its valuation to leave it with a market cap of $22.49bn (£17.2bn), while Roku’s shares tumbled almost 16% to $60 apiece, meaning it lost $1.6bn (£1.2bn), valuing the business at just under $9bn (£6.9bn).
Disney, whose parks and cruise operations could be more acutely affected by tariffs than its streaming business, saw shares drop 9% to $88.84, wiping more than $9bn off its value at just under $89bn (£68.3bn).
Fox shares were also down almost 10% to $47.90, meaning its market cap is now $2.4bn (£1.8bn) lower at $22.64bn (£17.4bn), while other US studios also saw declines.
Paramount Group shares were off 3.5% to $11.48, but Netflix saw little change with its shares down just under 2% to $917. Both Apple and Amazon, which are set to see their core tech and retail businesses deeply affected by the introduction of the tariffs, saw share prices decline by around 9%.
The extent of the tariffs, revealed via Trump on what he labelled Liberation Day, came as a surprise to many investors. From 5 April, a 10% baseline tariff is applicable to all goods going into the US, with that rate applicable to countries including the UK, Australia, Brazil and New Zealand.
Steeper tariffs have been slapped onto products from countries such as Japan (24%), Korea (25%) and China (34%), while Vietnam is among those hardest hits with a 45% tariff rate. Those tariffs come into effect from 9 April.
Countries in the European Union have also been hit with a 20% rate, with reciprocal tariffs on US products being considered by many around the world. That could then lead to a deeper trade war, and spark further US retaliation, factors that would further dent global trade and economic growth.
Europe’s TV and film industry already appears to be under pressure, with French TV and film body CNC admitting last week that it expects a “much more aggressive” US approach to its streaming regulation.
Trump has already noted EU legislation that “requires American streaming services to fund local productions”, while US streamer and studio body, the Motion Picture Association, has also complained obligations for its members in Europe.
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