You may have noticed over the past decade or two that some tentpole Hollywood productions were finding ways to bring in Chinese audience members. That may come from Chinese stars joining the cast or receiving partial financing from a Chinese company. This is because China is a huge potential market for film studios, as it’s the second-largest market in the world. But China already had pretty stringent rules on how many American films could be shown in the country, which was listed at 34, but due to the ongoing trade war with the US, that number is going to drop even lower.

The Chinese Film Association stated at a press conference that recent events will have soured the general public’s taste for American products, and that includes the films it produces. The CFA did say it will “moderately” reduce the number of American films without giving a firm number, but it’s no doubt a blow to an industry that’s suffering.

That said, Chinese interest in Hollywood films has been diminishing in recent years, but if pricey films like F1, Mission: Impossible, or Avatar get cut from the market, it could seriously hurt their box office prospects. Because of the diminishing financial returns in the Chinese market, this move will hurt the US film industry more than the Chinese box office, which recently had its film Ne Zha 2 surpass Inside Out 2 as the most lucrative animated film of all time, bringing in USD 2.1 billion this year. And while the limitation wouldn’t cripple the US industry, it’s still in recovery mode from the pandemic and the strikes, as ticket sales remain down, so any dollar lost will likely hurt.