Tensions between the United States and China have spilled over into the cultural arena, with Hollywood now feeling the brunt of escalating trade disputes. In response to Washington’s latest tariff measures, China’s National Film Administration announced plans to “moderately reduce the number of American films imported.” The move immediately sent shockwaves through the entertainment industry, with shares of Walt Disney and Warner Bros. Discovery taking a sharp dive.
The implications are significant. As the world’s second-largest film market, China represents a lucrative frontier for Hollywood studios. American filmmakers have long relied on Chinese audiences to bolster global box office revenues. However, the current political climate has cast uncertainty on future collaborations. U.S. studios are now grappling with the possibility of diminished access to one of their most profitable markets.
This development underscores the asymmetric nature of the U.S.-China service trade relationship. The U.S. consistently enjoys a substantial surplus, particularly in sectors like entertainment and technology. According to the U.S. Commerce Department, American service exports to China surged from $5.63 billion in 2001 to $46.71 billion in 2023. Hollywood’s dominance in global media has played a key role in this growth.
In contrast to the protectionist stance of the U.S., China continues to push for high-level openness and multilateral engagement. The recent film cooperation agreement signed during Spanish Prime Minister Pedro Sánchez’s visit to China highlights this commitment. The pact, which includes co-productions and professional exchanges, signals China’s willingness to partner with nations advocating for free trade and cultural collaboration.
At the same time, European Commission President Ursula von der Leyen has warned of potential retaliation against U.S. tech firms if transatlantic tariff talks falter. This points to a broader trend: America’s aggressive trade policy is increasingly alienating traditional allies and threatening its dominance in key service sectors.
The global tide is shifting. As China and other nations champion multilateralism and mutual benefit, Washington’s go-it-alone approach risks sidelining the very industries it seeks to protect. For Hollywood, and the broader U.S. service economy, the message is clear unilateralism comes at a cost.
