China opens new front in trade war with US with Hollywood import curbs

China’s National Film Administration (NFA) on Thursday announced an immediate restriction on imports of Hollywood films in retaliation for US President Donald Trump’s escalation of US tariffs on imported Chinese goods.

According to a Reuters report, China has been importing 10 Hollywood movies annually for the last three decades. The NFA said that Donald Trump’s tariffs would sour domestic demand for American cinema.

“We will follow market rules, respect the audience’s choices, and moderately reduce the number of American films imported,” the NFA said on its website.

The move comes as Trump increased the tariffs imposed on China to 125 per cent, even though he announced a pause to his measures for other countries for a period of 90 days. Beijing shot back by saying that it won’t sit back.

NFA’s move could be seen as a countermeasure, though analysts say the impact is likely to be minimal.

What would be the impact of China restricting Hollywood movies?

Chris Fenton, author of “Feeding the Dragon: Inside the Trillion Dollar Dilemma Facing Hollywood, the NBA, and American Business”, said the move was a “super high-profile way to make a statement of retaliation with almost zero downside for China.”

Hollywood studios once looked to China, and its giant film market, to help boost the box office performance of movies. But domestic films increasingly have outperformed Hollywood’s fare in China, with “Ne Zha 2” this year eclipsing Pixar’s “Inside Out 2” to become the highest-grossing animated film of all time, according to Variety.

Now, US films account for only 5 per cent of the overall box office receipts in China’s market. And worse for Hollywood, China taxes that small amount 50 per cent before any revenues go back to the USA,” Fenton told Reuters.

In 1994, China began importing 10 American films each year through the internationally recognised revenue-sharing distribution model. Imports including “Titanic” and “Avatar” became box office smashes in the Chinese market, making actors such as Leonardo DiCaprio and directors such as James Cameron household names among Chinese film lovers across generations.

China is the world’s second-largest film market. However, in recent years, as local entertainment culture has bloomed, the enthusiasm of Chinese audiences for Hollywood movies has waned.

Since 2020, domestic films have consistently accounted for around 80 per cent of annual box office revenue, a figure that previously stood at 60 per cent.