Bob Iger Warns of Tariffs’ Impact on Disney’s $60 Billion Expansion Plans
After President Donald Trump announced expansive tariffs on the United States’ largest trading partners, CEO Bob Iger warned of the negative impact on the country and Disney’s businesses as a result. This covers what the CEO said, plus our preliminary thoughts on the ramifications for Walt Disney World, Disneyland, Disney Cruise Line, etc.
During a surprise appearance at ABC News’ daily editorial meeting, Walt Disney Company CEO Bob Iger sounded the alarm on the announced “Liberation Day” tariffs. The United States already began collecting the across-the-board unilateral 10% tariff on all imports from many countries on Saturday, with higher levies on goods from 57 larger trading partners due to start on April 9, 2025.
These higher “reciprocal” tariff rates of 11% to 50% are calculated by taking the country’s trade deficit with the United States, divided by its exports, then divided by two. Under this so-called reciprocal formula, European Union imports will face a 20% tariff and Chinese goods will be hit with a new 34% tariff, bringing the total levies on China to 54%.
In response to the higher-than-expected tariffs, Disney CEO Bob Iger expressed concern about the impact an impending trade war may have on not just his company, but the American economy as a whole. Iger emphasized that relocating overseas manufacturing to the United States “speedily” is impossible. Iger also suggested that most people “don’t really understand how tariffs work,” according to Oliver Darcy’s Status newsletter.
Iger said that many major companies rely on specialized workers who would need to be replaced and trained domestically, which couldn’t conceivably happen quickly. The CEO pointed to Apple’s Foxconn plants in China, which employ hundreds of thousands of highly specialized workers, noting that it wouldn’t be possible to simply replicate their skill level overnight domestically. Anonymous staffers who were present at the meeting in New York City told Darcy that Iger’s comments appeared to be his push for ABC News to connect the dots for readers and viewers.
As discussion of the tariffs and the ABC newsroom’s coverage strategy continued, staffers described Iger as continuously jumping into the conversation to share his thoughts and offer more of what Darcy said were “unfiltered views.” He expressed concern for Disney Cruise Line, particularly its new ships that rely on steel for their construction. Iger stated that Disney may have to scale back its investment plans if costs rise too high.
Our Commentary
This is a ‘developing’ story that we’ve been watching for the last several months, and I’ve been waiting to write a new ‘What Does Walt Disney World Do During a Recession?’ article (that’s the old one–from during the Biden administration) until after the entire saga unfolded. Although there are already cracks in consumer confidence and other leading recession indicators, tariffs are unquestionably the elephant in the room.
With regard to tariffs, there’s little certainty. A new version of that article first written in January would’ve been dramatically different than one from March. Even ones written two days apart (pre-announcement versus post) in April would’ve differed radically. At this point, I’m holding off on comprehensive commentary until after the “reciprocal” tariffs are supposed to take effect on April 9.
That’s because there’s still a tremendous amount of uncertainty. In watching the Sunday news shows, this much was immediately apparent. Even those within the administration aren’t in agreement as to the end game and likely outcomes. So it should go without saying that some dude with a Disney blog is even more in the dark. Who lifts the tariffs and when are the biggest outcome-determinative factors. Things are a lot different if it happens via the administration in a couple of days versus two months via Congress versus after the midterm elections.
Like everyone else, I have my own thoughts on the spectrum of short-term and long-term impacts of the tariffs. Both for the country as a whole and Walt Disney World, specifically. No matter how you feel about the tariffs, it should be patently obvious that they will have an array of direct and indirect consequences for both the global economy and the Walt Disney Company, though.
However, we strive to avoid politics here–even with this inherently political topic–so I’ll eventually only be covering this to the extent necessary (if necessary) as it pertains to investments in Walt Disney World, Disneyland, Disney Cruise Line, etc. It nevertheless should be uncontroversial to say that it’ll be a negative for Disney in the short term, at the absolute minimum.
The administration itself has indicated as much in broad strokes about the U.S. economy, calling the tariffs “necessary short-term pain for long-term gain” and saying “sometimes you have to take the medicine to fix something.” So at least the immediate ramifications aren’t really in dispute. Whether those consequences are allowed to come to fruition are. The median voter is most likely to react to what they feel in the short-term (e.g. kitchen-table issues), so the longer-term providence of tariffs seems less material to any of these discussions than the weight it’s being given.
Already, the markets are reacting to the news. The Walt Disney Company’s share price dropped to $80.20 at market open on Monday, April 7, 2025. If it closes at that level, it’d be lower than the COVID lows, worst tumult of the late-stage Chapek regime, or even the proxy fight. Disney’s stock price hasn’t closed below $80 since mid-2014.
Disney is hardly unique in this regard. U.S. stock markets have been battered since the tariffs were announced, with three straight days of massive drops. The S&P 500 lost 4% at open on Monday, bringing its three-day losses to around 13%, a drop not seen in that short of time since 2008 during the Great Financial Crisis. If the benchmark closes at these levels, it will bring its losses from its closing record touched in February to 20%, a bear market in Wall Street terms.
The Dow Jones Industrial average tumbled 1,363 points, or 3.5%, following back-to-back 1,500 point losses for the first time ever Thursday and Friday. The Nasdaq Composite dropped another 4% at open on Monday, further into bear territory, as investors sold their tech winners to raise cash. The Nasdaq is off 26% from its high. The list of new 52-week lows is long.
Bob Iger’s comments during the ABC News meeting were interesting, offering “unfiltered” insight into the company’s contemporaneous thinking. His position is unsurprising, and in-line with most executives and business leaders, regardless of their past political affiliations or donations.
What is surprising to me is that Iger would’ve pointed to Disney Cruise Line as an impacted business. Perhaps it’s just an easier and less-abstract illustrative example since a ship is tangible, but I would think Disney Cruise Line is probably the business, at least on the Disney Experiences side, that’s least likely to be impacted by tariffs.
Disney Cruise Line’s new ships are built in Europe. They’re complex and likely involve a flow of components from around the globe, but the principle construction and imports are to the European Union, and not the United States. The end result–the completed ship–is not an import to the U.S., either, as the ships are flagged in the Bahamas.
I don’t doubt for a second that costs will increase for DCL to some extent. Such is the nature of our interconnected global economy. But my first thought when reading about the tariffs and their impact on Disney is that it would incentivize the company to put more of its eggs in the Disney Cruise Line basket.
Not just because DCL largely avoids the direct impact of tariffs, but also because there’s the ability to avoid (or at least mitigate) the indirect impacts. Whatever happens to the economy is going to occur on a global level; if the U.S. slips into a recession, we’re pulling other countries down with us. But consequences won’t be commensurate among nations, and Disney Cruise Line is the most nimble business. Ships can be moved around to different ports as demand dictates.
There’s also the matter of the backlogs at the shipyards. Admittedly, I haven’t stayed on top of this lately, but one of the big reasons Disney Cruise Line was full steam ahead during COVID was because pausing their plans could mean forfeiting a spot “in line” at the shipyards. Instead of Disney postponing or cancelling cruise ships during COVID, they doubled-down, buying a partially-completed ship that has since become the Disney Adventure. Even with tariffs, it’s hard to see Disney suddenly becoming less bullish on DCL in the long-term.
Walt Disney World and Disneyland are very different stories.
In addition to importing a variety of raw materials that will be subject to massive tariffs, Walt Disney World and Disneyland will import entire ride systems. To the best of my knowledge, all of the major roller coaster manufacturers are based in Europe. Disney cannot and will not simply ‘pivot’ to an American manufacturer (that does not even exist) or make the ride systems themselves. The cost in time and dollars would be greater than tariffs of an unknown duration.
Instead, if the tariffs remain in place, Disney will pay more for the roller coasters, ride systems, and variety of raw materials. This means that Monstropolis, for example, will get more expensive to construct. It’s unlikely that the plans for the coaster itself change at this stage in the game, as reworking them would also be costly. What’s more likely is that Disney will look to reduce investments elsewhere–or cut corners on the project itself via ‘unnecessary’ details or other elements that are deemed expendable.
This happened to some extent with projects at Walt Disney World as a result of COVID. World Celebration at EPCOT is the best/worst and biggest example. The center of the park became much less ambitious, trading unique features for trees and benches, and the striking multi-level festival center for CommuniCore Hall.
Another example came via Fantasy Springs at Tokyo DisneySea. While the attractions themselves didn’t lose any of their wow-factor, thankfully, corners were cut with the in-park hotel and seemingly with other details (or the lack thereof) within the land.
Based on early glimpses of Epic Universe thus far, it seems fair to say that the same happened with its in-park hotel and other smaller features. Still incredibly impressive additions that don’t deserve comparison to World Celebration, but you get the idea.
The silver lining was that projects fairly far along in development at Walt Disney World, such as Remy’s Ratatouille Adventure, TRON Lightcycle Run, and Guardians of the Galaxy: Cosmic Rewind, did not appear to have any cuts. Two of those are clones from the international parks, so we know they didn’t. They were all delayed, but none were cancelled or materially scaled back.
Walt Disney World’s bigger move during COVID was to shelve projects entirely: Play Pavilion, Spaceship Earth Reimagining, Mary Poppins Cherry Tree Lane, Reflections Lakeside Lodge, and more.
One of these (the DVC resort) has since been resumed, but others have not. This is to say nothing of the unannounced projects in development that weren’t announced. It’s safe to say Walt Disney World wouldn’t have had a gap in new additions from last year until 2027 but for COVID.
A similar approach is possible here, with actual vertical construction on Cars Land and Villains Land in a holding pattern until the tariffs are lifted. Even so, site work can begin on these projects since it’s not like dirt needs to be imported. Likewise, announcements for the back half of Walt Disney World’s 10-year plan might be postponed or quietly cancelled. (Easy to cancel something that hasn’t been announced.)
Pausing parks projects that have yet to begin, prioritizing DCL, and waiting out the tariffs seems like the most straightforward outcome here for Disney’s $60 billion, 10-year investment plan. Construction that is already underway will likely continue on its current timeline, and the added expenses will be “made up” elsewhere–whether that means corner-cutting on those projects or scaled-back plans as offsets in Villains Land and beyond.
At the risk of stating the obvious, COVID and tariffs are also not the same. The parks were closed for multiple months then, there were projections of a 5-year recovery, and Disney went all-in on streaming. Once the travel & tourism recovery did begin, it was difficult for Disney to pivot due to the streaming losses and the company’s debt load. Today’s circumstances are unique and very different from then.
Ultimately, it’ll be interesting to see what happens with investment at Walt Disney World as a result of the tariffs. Again, this is a preliminary assessment based on where things stand right now in this constantly evolving situation. I’m not convinced the current trajectory is the eventual one, which is why we’re not offering more detailed thoughts.
That’s also why this doesn’t touch on the demand side of the equation or operational cost-cuts should Disney’s worst-case scenario play out. And before anyone gets excited about Disney canceling unpopular projects or undoing potential closures, you might want to think twice about that. An easy way to achieve OpEx savings is to mothball venues that are “under construction.” So as much as I might like to see MuppetVision or the Rivers of America saved, the more likely outcome is an empty theater for years and the Giant EPCOT Dirt Pit: Magic Kingdom Edition.
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Your Thoughts
Do you think the impact of tariffs will be on Disney’s $60 billion investment plans for Walt Disney World, Disneyland, and Disney Cruise Line? Are you anticipating cutbacks or shelved plans if the United States enters a recession? Think Disney will do anything else? Do you agree or disagree with our commentary? We realize this is an inherently political topic, but please try to make your comments as apolitical as conceivably possible by addressing the ramifications for Disney as opposed to anything else. We’ll try to keep the comments open as long as possible with free discourse, but as soon as it devolves into personal attacks or gets politically charged, we’ll pull the plug.
Two words: EVERYBODY.LOSES.
Except Bob Iger, the former ABC weatherman who last year earned more in one month than most everyone earns working their entire life.
true…
As another mentioned, we have a fifteen day 5-figure vacation scheduled for this Sept and will not cancel. We own DVC so we’ll travel annually to WDW long as I own. However, the plans of the whole group may change. We generally take 10-16 people with us each year including many who’ve never been – spending upwards of $30k+. If I cut anything from the upcoming trip, it would be Universal 4 day stay. It’s already costing more than I hoped given we know we cannot do Epic without Express Passes, something I’d planned to forego. That alone is an additional $2k. I could see Universal taking a bigger hit than WDW in attendance, which may be a positive for us if impacts occur by fall. We can simply scale back and still visit WDW each year with resort stays or less park days, if necessary in the future, but I do hope Disney continues their plans as announced. We are one family who wishes to see them during the next 5-6 years.
Disney should slow done their cruise line expansion anyway. If they over expand it could become a huge liability.
Mr. Iger should be more concerned about both he and his executive team’s inability to head off a Snow White train wreck, two years in the making. Principally I’m against tariffs for both other nations imposing them on us and vice versa unless they are offset by the elimination of another more unfair tax such as property taxes and income taxes. Bob Iger is a smart man but he is also political and sneaky too. I see this as his way of undercutting the Trump administration while providing an excuse for cutbacks to their grand plans of building what will likely amount to 5 to 8 NEW rides. What is contrary to Iger’s keen intellect is his seemingly inability to easily prevent losses at the big screen. Snow White is not only a loss of hundreds of millions of shareholder capital it’s a lost opportunity to make over a billion dollars. The Little Mermaid was also a lost opportunity to make billions as well. How he or the executives working for him failed to replace Zegler after she crapped all over Walt’s historic masterpiece is mind boggling. That’s the real story he should be talking about.
And their astronomical bonuses, to boot! A 90 million dollar bonus is ridiculous, while complaining that money is tight. The average American is not even getting merit increases.
I don’t think any of this will “save” Rivers of America. Pretty sure the company has already decided that has to go. I think this just means they might cheap out on Rivers of America’s eventual replacement. Think Communicore Hall.
I don’t know much about the economics of the cruise industry…but it really sounds like Iger is just hinting that, if they have to cut something BIG to satisfy Wall Street, that’s where they’ll look first.
As a UK citizen who has visited the US numerous times and had several family holidays in Disney Florida we are re thinking our 2027 plans to visit. We love the place and the people. But the aggressive position that has made countries feel line opponents is really detrimental. We don’t feel we would be welcome. The stringent birder controls – last time our 6 yr old grandson was quizzed about the name of the hotel he was staying in – he couldn’t remember ! In total we had travelled fir over 15 hrs !He was reduced to tears and we couldn’t help or intervene – so it does happen !!
The prices are bound to rise as Disney had to fund the costs of importing specialist constructed items. The cost will be passed onto the visitor. This making what is all already an expensive trip for us now questionable.
Add to that the rhetoric towards other countries and foreign visitors it seems a long way away from the welcome last time we visited .
Asking a 6 year old the name of the hotel he will be staying at is pretty outrageous. As I am the Chief Vacation Planner in our family, my 50 yr old husband would probably have a hard time answering that question-lol.
I’m sorry that happened to you.
Fingers crossed they cancel that disastrous Rivers of America demolition plan.
“Disney Cruise Line’s new ships are built in Europe. They’re complex and likely involve a flow of components from around the globe, but the principle construction and imports are to the European Union, and not the United States. The end result–the completed ship–is not an import to the U.S., either, as the ships are flagged in the Bahamas.”
Very acute insight! That’s your lawyer brain working. Iger is stoking the flames of fear and you essentially caught him in his intellectual pessimism (dishonesty?). Regardless of political affiliation, NOBODY knows how this is going to play out. Drawing attention to the potential cost of Chinese steal that is not even being shipped to America…that’s hilarious!. In fact, the cost of steal may go down for the EU if US trade is halted or significantly curtailed. Love your blog and keen analysis as always. Keep up the good work, Tom!
I can’t believe you left comments open! And yeah, they are as depressing as I expected. As someone directly impacted by a lot of “what’s going on” I can’t read this stuff and feel anything other than a very deep despair. Hard to muster up the mental energy to think about how all this affects rollercoasters and the like (no judgment). Sigh.
Adam, are you already embracing despair? Really? That tells me you have little bit of money in the stock market. I therefore suggest you plop down some money and BUY more stock right now! The American market will recover mightily and if you don’t use this opportunity to invest, you will regret it later!
Hi Tom,
Love ya brother, but what “uncertainty” is there?
Seems 100% certain that we will have large tariffs here to stay for a long time – that has been made abundantly clear. Repeatedly.
Consequences of those tariffs flow pretty clearly too. All quite predictable and the only uncertainty I can see is SOME wiggle-room for WHEN things like Stock market meltdown will happen (like it already has). WHAT is going to happen is not uncertain at all.
Am wondering if any ‘uncertainty’ you are seeing out there might instead be temporary denial?
Tom, you mentioned the drop in Disney’s stock price over the last few days. Actually, the stock price hit a high of just over $200 back in the first quarter of 2021 but has been going down ever since. This has everything to do with Chapek instituting all the Woke and DEI initiatives at Disney. The latest example is the colossal failure of Snow White. I was hoping that would change when Iger took over but haven’t seen any evidence of that so far. As a result, the stock price will continue to decline, tariffs or no tariffs.
Disney has been inclusive and welcoming for a long time before 2021. Admittedly not during Walt’s era, but the stock price was also much, much lower then. Disney’s big movie release in Q1 2021 around the time the stock price peaked was Raya & the Last Dragon – a “woke” film set in Southeast Asia featuring Asian-American actors. Raya was sandwiched between Pixar’s Soul (with a Black lead) and Encanto (set in Colombia with a largely Latin-American cast). Just last month, Disney shareholders overwhelmingly voted against gutting DEI – only 1% voted in favor.
I would be fine with the new Cars attractions being halted forever. Save the Rivers of America!
Yessssssss
These series of punitive tariffs is a sledgehammer response to what should be nuanced actions. If nothing drastically changes within the next few months – either toward the positive or the negative – I suspect Disney and other parks will halt or significantly cut back on projects. I am sad for Epic / Universal as they will not get the numbers they need to be successful. As Tom mentioned there are no US companies that can provide many of the products parks need. On the IAAPA show floor more than half of the large exhibits / sales displays are from European companies. Last year representatives from different manufacturers told me “this is the last year they’ll be coming to the Convention for at least four years”, and this was BEFORE the tariffs.
Suddenly he’s worried about money after flushing multi millions on ridiculous movies that are failures at the box office
And he should be. Most of these live action remakes are bad ideas without any political bias. Cinderella was good, but after that, not so much. We want to see new stories, like Moana, etc.
He just needs something to blame the failures of the company on and it has always been what he politically and morally disagrees with. Chapek was worse, but still……
Bob is just giving Disney an excuse to charge more. Really DCL will not be impacted because they are assembled in Germany and registered in the Bahamas. DL/WDW could find American contracts similar to their Chinese suppliers who uber-tax America thus keeping more USD in the USA and boosting our economy. I’d rather have American quality in our parks anyway! Yes we’re all crying about how the short term changes are hurting our investments but long-term it is for the best! (even Pelosi and Obama had similar plans).
Slightly off topic here, but why was Mary Poppins Cherry Tree Lane canceled? Seems like Disney needs a few small wins on occasion.
Looks like Epic Universe got in on time. Too bad Disney doesn’t work as quickly. I’m hoping the tariffs may cause Disney to change their mind about getting rid of Rivers of America. One can only hope.
It’s great timing by Universal for Epic Universe to avoid the direct impacts, but we shall see about the indirect ones. Doesn’t exactly seem like the ideal climate for opening a brand new theme park and attempting to turn the resort into a multi-day destination.
Bob Iger is a BS artist and has run that company into the ground with his liberal ideas. Hopefully the BOD will hire someone better but Bob has stuffed the BOD with his buddies. I have been going to WDW since it opened in 1971 so I have seen it fall into ruins in the last 25 years, Just my two cents.
This. 1000%. We did not start going until 2001, but I have watched the decline from his leadership with a very heavy heart.
There is no long term benefit to the Us from tariffs. None. Even if manufacturing relocates back all it means is higher prices because american wage costs are too high for manufacturing. It brings no increase in jobs as unemployment rates was already near record lows.
The threat of war will rise substanially however. Your country must stop this lunacy with zero short and long term benefit.
On the disney front everyone outside the usa is cancelling trips. We are constantly being told stories of tourists being blocked from entry, strip searched and locked in cells overnight simply for trying to holiday in your country. We are cancelling our trip next year because my family is too scared to go. Ironically we will now go to Shanghai disney instead (and Im aware of the irony here).
As an American – I 100% agree with you!! I wouldn’t come here either. Just know that most Americans don’t want what is happening to our country. I didn’t vote for this and wish more Americans had voted to save us from this mess
As an American and in the majority of those who vote for Trump, he is doing exactly what he was elected to do. Secure our borders, get tough on crime, cut government waste, create good jobs, and stop unfair trade policies. America is safer now to visit many times over under the Biden admin. Trump will get he can out of the tariff negotiations and put the market back on track before the elections. In the meanwhile, don’t listen to the noisy left and the liberal media behind them.
On a sidenote, I’m confused how Disney+ can lose so much money despite owning most of the content.
If there is no long term benefit to tariffs then your country and every other one with tariffs against US goods should be dropped immediately? Or is it that tariffs are only bad when the US does them? How could you possibly think that the dollar having a higher value and workers having higher paying jobs as a result of reversing the deindustrialization caused by tariffs and conversion to consumption vs production could be bad for the people of the united states. Really? The unemployment rate is climbing and the labor participation rate is lowering and why? Because they can’t afford to live becuase they’re subsidizing everyone else on Earth via tariffs and having to provide for the defense of at least two continents. “The threat of war will substancially rise” because we demand ppl get rid of tariffs? I can’t even go into the idiotic hysterics of being strip searched for coming to Disney. I go to the parks all the time and I bet I hear less than 50 percent English being spoken. Go on to China! I’m sure they’ll appreciate you!
Yeah, we can’t compete with slave or child labor so we should just go back to business as usual. That sounds like a plan!
Craig Smith – even as you speak, Florida is making laws to allow children to work overtime on school nights.
Daniel – try to learn how tariffs work. They’re not a subsidy. Consumers pay them. So when the EU places a tariff on American goods, it’s passed on to the European consumer who pays for it. If the American manufacturer was absorbing (“subsidizing”, as you call it) the tariff, it would cut into their profit margins, and they would simply stop exporting the product because it would cost them more to export than it did to make. No American exporter is doing that. Not one. It simply does not make financial sense.
Yes, in time you can make products locally – as long as you have all the components and labor. But it’s going to be a long wait, and those American-made products are inevitably going to be more expensive, unless you depress the minimum wage, exploit child labor, and steal minerals from other countries. Hmm …
Boss, besides the fact China is way more dangerous to travel to (you disappear for saying the wrong thing vs lying about not working on your travel visa which is a crime in all countries, like all those recent propaganda stories you heard), Shanghai and Hong Kong Disneyland might not even exist by that time the way things are going
As previously said:
You may already have, but if you look at the tariffs some countries have on the US, some over 200%, while we historically paid them without getting anything in return, tariffs are fair play. I am not supporting or condoning any political affiliation by saying that….it just does not make sense that we would pay tariffs to every country in the world and not get anything in return and call it fair trade.
If the goal is to be fair, I agree with it, even knowing it will hurt our pockets in the short-term. If the goal is to have other countries keep their criminals from coming over the border, I agree with it. If the goal is to boost our economy, even if it hurts our pockets in the short-term, I agree with it. If the goal is to stop American companies from buying cheap Chinese garbage, I agree with it. I would rather have a roller coaster built from German steel, than one that comes from Temu (tongue-in-cheek). Where I feel it is crazy is not starting lower and moving up. I also do not agree with making Rocket Man in Korea mad. He is about one tempter tantrum away from lighting the fuse.
I skipped the Sunday news shows this week in anticipation of commentary on this from “some dude with a Disney blog.”
You always do such a great job contextualizing these tough subjects. I find it easier to understand anything when I can learn how it specifically affects Disney World. Thank you, as usual.