Photo: VCG

China's market is open in principle. The indiscriminate imposition of tariffs by the US government hurts the feelings of the Chinese people, and the Chinese market will respond accordingly. We will not deliberately make things difficult for the US movie industry, but we will also respect the market's choices, Yuyuantantian, a social media account affiliated with China Media Group, said on Friday, as the movie sector of the US capital market has fallen sharply in a row, and even set a record for the worst fall in recent years in response to a recent statement by China Film Administration that it will "moderately reduce the number of US films imported."

The film industry is one example, and the same applies to other industries. The film industry is innocent, and the US government, obsessed with its tariff war, should heed the underlying message of this trend and pull back from brink before it's too late, Yuyuantantian said.

Yuyuantantian noted that using the film industry as an entry point to explain the market impacts of tariffs to the US sends two key signals. First, many US industries aspire to expand investments in the Chinese market. If the US government persists in the indiscriminate imposition of tariffs, the film industry will neither be the first nor the last sector to suffer consequences. Second, reducing imports of American films will not only impact box office revenues but also jeopardize the extensive interests of US film companies in China.

After China announced the plan to moderately reduce the number of US films imported, several US film companies experienced stock price declines including Walt Disney Company, Comcast Corporation, Sony Group Corporation, Paramount Global and Netflix, according to Yuyuantantian.

Yuyuantantian noticed that these companies not only engage in film distribution and screening but also have development and production businesses, as well as cross-industry integration with sectors like gaming, theme parks, and consumer goods. The sharp decline in their stock prices reflects the capital market's concerns about the potential impact of these companies' derivative businesses in China.

Beyond physical goods to trade involving imports and exports, the film industry, as a cultural and entertainment sector, also concerns the recognition of US IPs in China. 

US tariffs have harmed the emotional connection of Chinese consumers, and their response will not merely manifest in the box office performance of individual films, but more profoundly reflect in their attitudes toward these film IPs, said Yuyuantantian.

IP-derived products are the main profit driver for the US cultural industry. If Chinese consumers reject American IPs and brands, this trend will likely spillover into other sectors beyond film, the social media account warned.

Global Times