US President Donald Trump has directed the Commerce Department and Trade Representatives to impose a 100% tax on foreign films released in the US, effective immediately. This decision is expected to seriously impact Telugu cinema, especially in North America—Tollywood’s second-biggest market after Telugu states. Many Telugu films have earned massive overseas collections, sometimes even covering domestic losses.

With the new tax, ticket prices in the US may rise significantly, reducing audience turnout. Producers could also face losses if films flop, as distributors may be unwilling to bear the added tax burden. While successful movies might recover through higher returns, the overall revenue for Tollywood from overseas markets is likely to decline.

The first Telugu films expected to face this tax are Sri Vishnu's Single and Vijay Deverakonda's Kingdom, which may set the tone for Tollywood’s future in the American market. It remains to be seen whether a tax or another mechanism will be finalized soon.