Newsweek recently reported that Hollywood, which is representative of America’s entire entertainment business, is uneasy over losing the Chinese market, the biggest in the world, as a repercussion of the trade war between the U.S. and China, which has escalated with the U.S.’s introduction of high tariffs on Chinese goods.
Prospects are that the Chinese government may impose an embargo on Hollywood movie importation as a revenge on the high customs rate.
Film quotas have emerged as issues in trade disputes of the past as well. The current allowance for Hollywood imports in China is 34 per year on average.
The Chinese box office has overtaken its North American counterpart with last year’s total revenues of $8.6 billion, an increase of 22% compared to the previous year. There are even some Hollywood films that manage better results in China than in the U.S., most representatively the 2016 fantasy Warcraft. The film stopped at $47 million at its home ground, but raked in nearly ten times the amount in foreign markets with $433 million. Most of the film’s global income was earned in China.
Robert Cain, president of Pacific Bridge Pictures, which collaborates with Chinese producers, told Newsweek that “China is universally recognized as the world’s biggest market and the best leverage Hollywood can use,” and that there will be numerous job losses in the television industry as well as Hollywood if China closes the gate to its film market due to Trump’s tax aggression.
Researcher Derek Scissors at the American Enterprise Institute (AEI) told the Hollywood entertainment magazine Variety that “the film quotas will be the easiest way for China to retaliate against Trump’s taxes.” He also suggested that the film industry may suffer a blow, saying that China will fetch in more high-profile targets than crops like soybeans once the discord intensifies.
