Hollywood blackout: China slashes US film imports after Trump’s tariff escalation

In a marked escalation of its trade tensions with the United States, China has announced that it will curtail the import of Hollywood films, following a steep rise in tariffs imposed by U.S. President Donald Trump. The move, revealed on April 10 by China’s National Film Administration, comes as a direct countermeasure to the latest round of tariff increases imposed on Chinese goods. This shift in cultural policy marks the first time in decades that China is using entertainment as a retaliatory lever in a high-stakes economic conflict.

China’s statement signalled that the “abuse of tariffs by the U.S. side” had soured the local audience’s sentiment toward American films. As a result, the country’s film administration said it would “moderately reduce” the number of U.S. titles allowed into its tightly regulated box office. Though the overall economic impact may be limited compared to manufacturing tariffs, the geopolitical symbolism is potent, particularly as the entertainment industry has long stood as one of America’s most influential soft power exports.

How important is the Chinese market to Hollywood’s global box office revenue?

Over the past two decades, China has become an indispensable component of global box office revenues for major U.S. studios such as Walt Disney Co., Paramount Global, and Warner Bros. Discovery Inc. With a population of over 1.4 billion and rapidly modernising cinemas, China became the world’s second-largest film market in 2012, overtaking Japan. By 2020, it had even briefly surpassed the United States in box office revenue, thanks to its early reopening post-COVID-19 lockdowns.

Hollywood’s foothold in China was historically governed by a quota system. Since the late 1990s, China allowed a limited number of foreign films—mostly from Hollywood—into its theatrical market. Initially capped at just 10 movies annually, that number gradually increased over time to around 34 under a revenue-sharing model, alongside additional films imported on flat-fee agreements. The system gave U.S. studios access to a growing audience while allowing Beijing to tightly control cultural imports.

Films like Avengers: Endgame and Fast & Furious 7 achieved massive box office success in China, contributing hundreds of millions of dollars to studio revenues. Yet in recent years, that enthusiasm has cooled. Analysts attribute this decline not only to increased competition from Chinese blockbusters but also to growing political tensions and regulatory tightening. A string of Hollywood films, including Barbie and Spider-Man: No Way Home, have faced delayed or denied releases in the country, often without clear explanation.

What triggered the latest U.S.-China trade conflict over cinema?

The immediate spark for this cultural retaliation came after U.S. President Donald Trump dramatically raised tariffs on Chinese imports, increasing some rates up to 125%. While the stated intention of the tariffs was to level the playing field for American manufacturers and reduce the U.S. trade deficit with China, the move triggered swift backlash. Beijing’s decision to curb imports of U.S. films is one of its first retaliatory actions targeting American cultural exports in this latest chapter of the trade war.

China’s National Film Administration framed its decision as being driven by market considerations, citing a “declining appetite” among Chinese audiences for American content. In a carefully worded statement, the agency also said it would “respect audience preferences” while still adhering to “market principles.” But industry experts widely interpreted the announcement as a politically motivated decision, intended to pressure Washington by targeting a high-profile and globally visible industry.

How significant is the impact on U.S. entertainment companies?

The market reaction to China’s move was swift. Shares in major American entertainment companies fell after the announcement. Walt Disney Co., which has historically benefited from China’s embrace of its Marvel and Pixar franchises, saw its stock price drop by 7.6%, closing at $84.48. Paramount Global and Warner Bros. Discovery Inc. also posted declines, reflecting broader investor anxiety over diminishing international revenue streams.

Hollywood insiders suggest that even a symbolic reduction in access to the Chinese market could affect greenlighting decisions, particularly for big-budget films that rely on global earnings to turn a profit. Theatrical releases often cost over $200 million to produce and market, and studios now increasingly factor in international appeal—especially from China—when shaping scripts and casting roles.

Chris Fenton, a former executive at DMG Entertainment and author of Feeding the Dragon, noted that China’s retaliation through film restrictions is a low-risk, high-visibility move. “It’s a super high-profile way to make a statement of retaliation with almost zero downside for China,” he said in remarks carried by Reuters. “It also shows the interconnectedness of global industries—trade wars don’t just hit steel and semiconductors anymore. They hit storylines and cinema screens.”

Why is Hollywood’s influence in China already waning?

Even before this most recent development, Hollywood’s position in China had been in slow decline. Domestic films have steadily gained market share, powered by nationalistic themes, high production values, and government incentives. Since 2020, Chinese movies have accounted for nearly 80% of the country’s annual box office revenue. Homegrown titles such as The Battle at Lake Changjin and Hi, Mom have set local box office records, reflecting a shift in audience preference.

The success of Ne Zha 2, an animated fantasy film based on Chinese mythology, illustrates the rise of local content. Grossing over $1.9 billion globally, the film outperformed many international blockbusters and reinforced the viability of China’s own cinematic universe. Government-backed projects are often granted prime screening slots and wide releases, helping to cement their dominance.

The government has also tightened ideological scrutiny, particularly after tensions between Beijing and Washington increased during the Trump administration. Films perceived to contain “negative portrayals” of China, support for Taiwan, or LGBTQ themes have faced censorship or been denied release outright. Studios now walk a fine line—balancing the demands of Chinese regulators with the values and freedoms expected by Western audiences.

Could China’s Hollywood import restrictions reshape the global film industry?

China’s decision to wield Hollywood access as a geopolitical tool may accelerate existing shifts in the global entertainment landscape. As American studios reassess their dependence on Chinese revenues, some are pivoting to other growth markets such as India, Southeast Asia, and Latin America. Meanwhile, China continues to invest heavily in its domestic film ecosystem, including state-of-the-art production facilities, AI-enhanced scripting tools, and international co-productions with non-U.S. partners.

Furthermore, the growing prominence of streaming platforms has provided studios with alternate revenue channels. Services like Netflix and Amazon Prime Video, while still restricted in China, are expanding aggressively elsewhere. Even traditional studios are adapting by launching their own direct-to-consumer offerings, such as Disney+, to mitigate regional market risks.

Yet the symbolic weight of losing China as a major theatrical market cannot be ignored. For decades, Hollywood was one of the few U.S. exports that enjoyed near-universal popularity across cultures. A sustained decoupling could signal not just a commercial loss but also a waning of American soft power in a multipolar world.

Ultimately, this latest development underscores how deeply trade tensions now cut across industries, influencing not only tariffs and trade balances but also storytelling and cultural exchange. With both the U.S. and China digging in their heels, it appears that the era of mutually beneficial Hollywood-China cooperation may be entering a new—and far more uncertain—phase.