Trump's new tariffs 'could see BBC licence fee scrapped'
BBC viewers could be hit in the pocket by Donald Trump's aggressive policy to bolster Hollywood, with ministers being warned of possible repercussions. There's concern in Westminster about the US President's suggestion of slapping a 100% tariff on all foreign-produced films and TV shows.
This potential move could seriously harm BBC Studios – the corporation's money-making wing that banked £454million from its American audience last year, with the USA being a crucial source of money. One expert has said that could mean a move away from the licence free to a "different model".
Shows like Doctor Who and Frozen Planet are huge across the pond, but it's not yet clear if these tariffs would impact only the big screen or the telly side of things as well. MPs believe the effect on the BBC's wallet might be dire, with the licence fee cash already getting thinner.
The Conservative Shadow Culture Secretary Stuart Andrew voiced his concern in the House of Commons, pressing the government for clarity: "What assessment have they made on the potential drastic cut in the BBC Studios profits, that sells into the US market, could have on the licence fee?"
Brit households might have to pay more to keep their current services going as fewer people splash out on licences and more make the jump to streaming giants like Netflix. Culture Minister Sir Chris Bryant said the government was "already in active discussions with the top of the US administration on this subject".
BBC Studios raked in more than £1.8billion globally last year, a dip from £2.1billion the previous year – highlighting the broadcaster's increasing dependence on overseas sales to bolster domestic services. When asked about how the broadcaster might fill the void if US sales plummet, the BBC declined to comment.
Mr Andrew also said: "They wasted five months when they could have been negotiating. They need to highlight [to President Trump] that tariffs will hurt US businesses as they have invested in UK facilities."
Trade talks are now understood to be ramping up as ministers scramble to shield UK exporters from Trump's incoming trade regime, which could slap blanket 10% tariffs on a wide range of British goods. Hollywood insiders have reportedly urged the US administration to target overseas film producers. Among them is actor Jon Voight – Angelina Jolie 's father – who is said to have lobbied for tariffs on non-US content.
Media experts say the row could trigger a fundamental rethink of the licence fee, currently set at £174.50 per year. Professor Patrick Barwise, of London Business School, told the Telegraph: 'This will further feed into a sense that it is going to damage BBC Studios' ability to generate revenue from [the US] market. The contributions from BBC Studios are used to subsidise the licence fee. My hunch is that we'll end up with a different model from the licence fee.'
He added: 'This is going to hit its exports, but also it will hit other UK studios. It hits the whole distribution system and it will increase costs.'
The BBC's Royal Charter, which underpins the licence fee model, expires in 2027. Talks to agree on a new funding model are expected to begin later this year. Current Culture Secretary Lisa Nandy has already described the model as 'unenforceable', raising speculation that Britain could be heading for a radical overhaul of how the national broadcaster is funded.
A Government spokesperson said: 'Talks on an economic deal between the US and the UK are ongoing – but we are not going to provide a running commentary on the details of live discussions or set any timelines because it is not in the national interest. We will continue to take a calm and steady approach to talks and aim to find a resolution to help ease the pressure on UK businesses and consumers.'
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