China plans to reduce the number of Hollywood films playing in the populous country amid escalating trade tensions, reducing access to what was once a vital market for U.S. blockbusters.
President Trump on Thursday boosted tariffs on Chinese goods to 145%, a day after partially pausing plans to raise tariffs for most other countries. Xi Jinping’s government has not buckled, instead vowing to “fight to the end” to protect its economy.
While stopping short of a full ban, the China Film Administration said Thursday that fewer U.S. films would be granted entry. The agency did not specify the number of releases it plans to permit, instead saying it would “follow market rules, respect the audience’s choice, and moderately reduce the number of American films imported.”
Reports earlier this week suggested Chinese officials had been contemplating a prohibition on Hollywood features, which would have dealt a major blow to entertainment companies struggling to rebuild their movie businesses after major setbacks, including the pandemic and labor strikes and a weaker pipeline.
International distribution remains hugely important to Walt Disney Co., Warner Bros. Discovery and Sony Pictures Entertainment as more than half of major studios’ theatrical revenue comes from overseas audiences.
Business in China is not as robust as it was a decade ago for Hollywood. China has invested heavily to grow its own local production industry and has been less enthusiastic about U.S. movies since 2020 and the outbreak of COVID-19, which prompted chilly relations between the two global superpowers.
Signs of a thaw surfaced last year when 42 U.S. films released in China, according to Omdia analyst David Hancock.
There were notable bright spots. Two American films released last year in China surpassed $100 million in ticket sales: Disney’s “Alien: Romulus” ($110 million in China) and Warner Bros.’ “Godzilla x Kong: The New Empire” ($132 million). Such revenue is often key to a film’s profitability.
However, Hollywood’s box office in China last year still was about 75% below the 2017 peak, according to TD Cowen media analyst Doug Creutz.
China is the world’s second-largest movie market and its home-grown films are infused with government-approved patriotic and culturally resonant themes. This year, China’s biggest films have been local productions. “Ne Zha 2,” which has made more than $2 billion, is one of the top-grossing movies of all time.
There are reasons why China has not totally slammed the door on Hollywood, Hancock and other analysts said.
The country needs American blockbusters to draw moviegoers to theaters and shopping complexes after a massive building of entertainment and other commercial developments. China has been focused on boosting its consumer spending, and having some Hollywood product helps plug the gaps in its local pipeline, analysts said.
U.S. entertainment companies have been bracing for additional fallout from the global trade war — including a possible backlash against its products and a weaker advertising market.
“Given that the Asia Pacific region accounted for nearly 40% of global box office revenue in 2024, this poses serious concerns for studios reliant on global success,” Hancock wrote in a research note this week. “Animosity toward the US following the implementation of Trump tariffs may further weaken Hollywood’s presence in these regions.”
During the televised portion of a cabinet meeting, Trump reportedly was dismissive of China’s move, saying: “I think I’ve heard of worse things.”
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