President Donald Trump’s trade tariffs against China reportedly have endangered Hollywood’s push for greater access to Beijing’s booming film market.
Trump has imposed 25 percent tariffs on $34 billion of Chinese goods, with similar penalties on an additional $16 billion worth of products expected to go into effect shortly. He also has threatened levies on an additional $200 billion of Chinese products in the next month, Bloomberg reported. Beijing responded to Trump’s first wave by matching duties on a similar amount of U.S. imports and has threatened to retaliate against any further U.S. tariffs.
“The consensus is that this is catastrophic for Hollywood, for its major source of funding and major overseas market,” Rob Cain, partner at Pacific Bridge Pictures and founder of ChinaFilmBiz.com, told NBC News’ Claire Atkinson.
“Things were already very delicate and fraught. This is like a blind, drunken bull crashing into a China shop,” he said.
China has become a key market for U.S. studios from Walt Disney Co. to Universal Pictures. “The Fate of the Furious,” the latest instalment of Universal’s “The Fast and the Furious” franchise, was the second top grossing film in China last year while “Avengers: Infinity War” has taken 1.6 billion yuan ($251.23 million) so far this year, Reuters recently reported.
China’s box office revenue rose 13.45 percent last year to 55.91 billion yuan ($8.6 billion), accelerating after a sharp slowdown in 2016. Meanwhile, American movie attendance is at a 22-year low, but film fans still spent $11.1 billion last year.
However, China remains very protectionist about which movies it allows to be shown. Hollywood studios and their trade body, The Motion Picture Association of America, had hoped to renegotiate a 2012 agreement to raise a Chinese quota on imported films and boost the share that overseas producers get of box-office takings, Atkinson explained.
China’s quota system allows 34 imported movies a year to be shown in theatres, while overseas producers get a 25 percent share of box office takings, less than in other international markets. Since 2016 a handful more have been allowed in via a “cultural exchange” channel.
U.S. studios had hoped for an improved deal for imported films last year. This, however, had been held up as Beijing rejigged its film regulator, handing more control to the ruling Communist Party, and then as trade tensions with the United States grew, Reuters reported.
Hollywood producers are pushing for more access, but a bigger share of revenues was even higher on the agenda, especially as locally-made productions became more competitive.
Hollywood movies, which once ruled in China, are seeing a rising challenge from locally-made productions, while a spate of tie-ups and financing deals have gone sour amid cultural clashes and a brighter spotlight on risky Chinese investments.
(Newsmax wire services contributed to this report).
© 2024 Newsmax Finance. All rights reserved.