China recently announced that it's limiting the number of U.S. movie releases there, in response to President Donald Trump's high tariffs against that country. Hollywood has been through a lot in the past several years, with roller coaster ticket sales and hit after hit from the rise of streaming, the COVID pandemic that kept audiences at home, worker strikes, and a lot of productions leaving Southern California.
And so, Hollywood is currently “anxiety-ridden,” says Erich Schwartzel, author of Red Carpet: Hollywood, China, and the Battle for Cultural Supremacy and Wall Street Journal reporter.
“There are several causes of concern in Hollywood right now … from the business model that worked for decades starting to show cracks, to residual effects from the strikes, and still from COVID-19. There's just been one bad turn after another,” he continues.
With so many ups and downs, the industry is spooking away a generation entering the workforce. “When you talk to younger folks in the industry, they don't know if there's a 20-year future in this for them at this point,” says Schwartzel.
Film LA reports that television and film shoots in Los Angeles fell by close to a quarter in the first three months of 2025. California lawmakers have introduced legislation to bring productions back to the Golden State by issuing better tax incentives. That still might not be enough.
“If you shoot [movies] in one of these European countries, it's not like … a nice 20% off the top. It can sometimes turn a $15 million movie into a $30 million movie. It's hard to compete whenever some of these markets offer so many incentives and perks,” Schwartzel says.
As for China’s plan to limit Hollywood films there, it’s more symbolism than a big financial blow, he says.
“If we were having this conversation six years ago, seven years ago, it would be a major line item on the budgets of the studios because … around 2018, 2019, major Hollywood movies could regularly gross more than $100 billion in China alone. Sometimes a massive hit would make $400-500 million in China alone.”
Then China’s own movies got good, which attracted its domestic audience, he explains.
“By the time these tariffs rolled around earlier this month, Hollywood grosses in China had fallen precipitously. … It wasn't a make-or-break number as it had been in the past. … So to shut off the spigot like this … it signals to the U.S., ‘We don't care about that cultural influence anymore.’”
Schwartz suggests that Hollywood may need to adapt to a more global and mobile workforce to ensure its future.
“There is cause for optimism because thinking of the entertainment industry as less tied to one place and perhaps even more of a roaming career is probably a reality that a lot of people are going to have to face.”