China is a vital market for the U.S. film industry. Here’s how the trade war could have major impacts.

“A couple of prominent bloggers who are connected to the main party in China suggested that China might consider putting blocks on the Hollywood films that do get released in China,” said Sharon Waxman, editor-in-chief of “The Wrap,” which covers Hollywood’s reliance on international ticket sales.

The sources who first reported the potential ban are well-connected in China’s media establishment. However, it’s not clear when or if these retaliatory measures would take effect. 

On Thursday, China’s Film Administration said it would “moderately reduce” the number of U.S. films it imported into the country, in response to the new tariffs.

“The wrong action of the U.S. government’s indiscriminate tariffs on China is bound to further reduce the favourable impression of domestic audiences on American films,” a statement from the film administration said.  

Although China restricts American films, one industry expert said the average U.S. film makes about 10% of its gross from the China market.

At the box office, “A Minecraft Movie” wasn’t just a blockbuster in the U.S. It also topped the charts in China last weekend.

Last year, “Godzilla X Kong” made more money in China than anywhere else in the world, including the U.S.

Monique White is the executive vice president at California Pictures, a distributor of independent films. She said studios losing revenue from a massive market could impact production in the future.

“That means their budgets are gonna have to go down because they’re not gonna see that money coming out of China and if what happens in China’s gonna happen in Europe and in Australia and any other countries, those budgets are gonna have to get squeezed even more,” White said.

Impact of tariffs on Hollywood

The potential impact of trade tension with China is the latest issue for an industry still trying to recover from back-to-back labor strikes and a nearly two-year shutdown due to COVID-19 pandemic.

“What people in Hollywood worry about is that there is inevitably going to be some pullback,” Waxman said. “People will go to the movies less if they were going. They might have one less streaming service.”

The latest on Trump’s tariffs

Mr. Trump announced a 90-day pause on tariffs for most countries on Wednesday, while lowering the “reciprocal tariff” rate to 10%.

The president also increased tariffs on goods from China to 125%.

“Based on the lack of respect that China has shown to the World’s Markets, I am hereby raising the Tariff charged to China by the United States of America to 125%, effective immediately,” Mr. Trump wrote on Truth Social.

In response, the European Union on Thursday announced its own 90-day pause on retaliatory tariffs. Meanwhile, China’s Commerce Ministry spokesperson, He Yongqian, said, “China’s position is clear and consistent: the door to talks is open, but dialogue must be conducted on an equal basis with mutual respect. China will stand by its position until the end. Pressuring, threatening, and blackmailing are not the correct ways to deal with China. We hope that the U.S. will work with China.”

Carter Evans

Carter Evans has served as a Los Angeles-based correspondent for CBS News since February 2013, reporting across all of the network’s platforms. He joined CBS News with nearly 20 years of journalism experience, covering major national and international stories.