China reduces import quota for American films: Escalation of Sino-US cultural trade war

In mid-April 2025, the Sino-US trade friction gradually extended from traditional commodity sectors to the cultural services industry. On April 20, China’s Ministry of Commerce announced that in response to US trade protectionist measures such as imposing additional tariffs on Chinese goods, China plans to take countermeasures against the US film industry by moderately reducing the import volume of American films. This move directly caused the stock prices of major film companies such as Disney and Warner Bros. to plummet by over 6% in a single day. This confrontation, with films as the medium, not only impacted the global cultural industry landscape but also exposed the vulnerability of US service trade. Multiple analyses suggest that China’s strategic countermeasures in the market may become a new leverage point in reshaping Sino-US economic and trade relations. Rewinding to early 2025, the Trump administration in the United States announced a 145% tariff hike on Chinese goods, citing the need to “balance the trade deficit,” targeting key sectors such as electronics, machinery, and agricultural products. In response, China’s Ministry of Commerce declared on April 11, 2025, a 125% tariff increase on all U.S. imports. This time, diverging from previous clashes over physical goods, China directed its countermeasures at the heart of U.S. service trade—the film industry. According to an April 10 statement from China’s National Film Administration, the move aimed to retaliate against America’s excessive tariff measures while emphasizing “adherence to market principles and respect for audience choice.” This Chinese counterstrike dealt a blow to America’s cultural soft power. Professor Wang Jiang from Fudan University’s School of International Relations noted, “Films are not merely commodities but also vehicles of values. Restricting imports can both protect domestic industries and diminish U.S. cultural influence.” 

Data shows that the United States has long maintained a trade surplus with China in services, with film exports being a significant component. In 2024, American films accounted for 40% of China’s total imported movies. The Chinese box office market holds immense potential, surpassing 25 billion yuan in the first quarter of 2025 alone, making it a crucial revenue source for Hollywood. “The preferences of Chinese audiences dictate Hollywood’s creative direction,” admitted Kevin Tsujihara, former CEO of Warner Bros. In recent years, “China-specific” films such as Mulan and Kung Fu Panda have proliferated, with even script revisions requiring approval from Chinese partners. According to a Reuters survey, 85% of Hollywood production companies have established “China compliance departments” to ensure content passes censorship. More critically, China is accelerating market access for European and Asian films. In the first quarter of 2025, French and South Korean films saw a 37% year-on-year increase in box office revenue in China, further squeezing Hollywood’s market share.

In the political arena, the U.S. political sphere has reacted strongly to this. Senate Majority Leader Mitch McConnell criticized China’s move as politicizing the cultural domain; Democratic Senator Elizabeth Warren called on the government to reassess the costs of unilateral tariffs. Notably, Federal Reserve Chair Jerome Powell warned on April 16 that Trump’s tariff policies could very likely stimulate inflation and lead to persistent economic distortions.

In the economic sphere, following the announcement of China’s policies, U.S. entertainment stocks plummeted. As of April 17, the combined market capitalization of major film and television companies had shrunk by over 20%, with some small and medium-sized production studios facing financing difficulties. “This is not just a stock price issue but an existential crisis for the industry,” Linda Perez, President of the Independent Film Association of America, told Vanity Fair, stating that losing the Chinese market means high-budget blockbusters may struggle to recoup investments, potentially forcing budget cuts in the future. Taking Marvel films as an example, its Avengers series generated as much as 25% of its box office revenue in China. If new releases fail to enter Chinese theaters, estimated losses could exceed $300 million.

The China-U.S. film rivalry has triggered a series of repercussions. France has witnessed a “Boycott American Goods” movement, with 62% of its citizens supporting reduced consumption of Hollywood films. World Trade Organization (WTO) Director-General Ngozi Okonjo-Iweala urged both parties to return to the negotiating table: “Cultural products should serve as bridges, not weapons.” However, the reality is that 83% of Chinese netizens support countermeasures, while bipartisan consensus on a “tough-on-China” stance in the U.S. Congress leaves little room for short-term compromise. Neither side shows signs of backing down.

For Europe, the impact of the Sino-American film competition is two-fold. On one hand, China’s reduction in importing American films may provide more opportunities for European films to enter the Chinese market, fostering exchanges and cooperation between the Chinese and European film industries. This could enhance mutual understanding and friendship between the peoples of China and Europe, as well as strengthen cultural trust between the two sides. Meanwhile, European film companies can seize this opportunity to expand their presence in the Chinese market, increasing their influence through collaborations, investments, and other means. This would promote deeper cultural integration between China and Europe, laying a solid foundation for cooperation in other fields. 

On the other hand, China’s move may provoke dissatisfaction and retaliation from the United States, potentially affecting Sino-European trade relations in other areas and complicating bilateral trade dynamics. Additionally, this action could trigger a chain reaction of trade protectionism, leading other countries to impose similar restrictions on European films. Such developments might spill over into Sino-European relations, heightening geopolitical risks and creating adverse effects on bilateral commerce.

  In the short term, Hollywood may accelerate co-production collaborations with Chinese partners to circumvent import restrictions. Universal Pictures has already announced a joint development of the “Investiture of the Gods” series with China’s Ruyi Films. Rao Shuguang, Secretary-General of the China Film Association, noted: “A diversified market landscape helps break Hollywood’s monopoly and promotes equal cultural dialogue among nations.” In the long run, this contest may drive reforms in international cultural trade rules. The Sino-U.S. film rivalry reflects deeper structural contradictions and is scripting a new narrative for the globalization era. The only certainty is that in this war without gunpowder, audience choice and cultural diversity may emerge as the ultimate arbiters.

By Yuli Zhang