Oh No, China Will Reduce Hollywood Imports. However Will We Survive?

Hollywood is catching a stray in what has morphed from a global trade war into a mostly bilateral fight between the United States and China, after the Administration paused tariffs against most of the world (save for a 10 percent baseline, which somehow now feels acceptable — like getting shot in the knee instead of the head). In response, China says it will “moderately reduce” the number of U.S. imports.

Ten years ago, when the Fast and Furious movies were dominating the Chinese box office, this might have been a bigger deal. These days, not so much. China has reoriented its film market around homegrown hits rather than American franchises — the highest-grossing animated film of all time, Ne Zha 2, for example, has earned $1.8 billion this year, almost entirely within China.

Last year, only two American films even cracked $100 million at the Chinese box office — Godzilla x Kong: The New Empire earned about $130 million, while Alien Romulus pulled in $107 million. And yet, because of a 2012 agreement allowing more U.S. films to be released in China, local exhibitors take a staggering 75 percent cut of ticket sales. That left U.S. studios with roughly $32 million and $25 million, respectively, from their two biggest hits in China last year.

In other words, the reduction in imports won’t hurt Hollywood much — not because China isn’t a massive market but because the damage has already been done. American studios have largely stopped chasing Chinese audiences, simply because there’s not as much money to be made there anymore, outside the occasional creature feature or co-production (Jason Statham’s The Meg, for instance, checked both boxes).

(The sarcastic headline should not be read in any way to suggest that we agree with the U.S. Administration’s trade policies with respect to China.