Stock markets around the world have been plunging.

The share prices of U.S. companies like Apple, Amazon, and ExxonMobil have been battered in the latter part of this year.

Some of this is being blamed on chaos in the Trump White House and the president's insistence on ramping up a trade dispute with China.

The worst market losses came after the U.S. sought the extradition of Huawei executive Meng Wanzhou, who was arrested at Vancouver International Airport on December 2.

Meng's now out on bail. It appears as though China has retaliated by arresting two Canadians. The International Crisis Group's Michael Kovrig and tour guide Michael Spavor have been kept in prison over Christmas.

This sequence of events has me thinking about the potential impact of Trump's trade war—especially as it could affect the B.C. film industry. According to Creative B.C., this sector contributes $3.4 billion to the provincial economy.

I began by looking at the 2018 movies with the top 15 domestic box-office receipts, as reported by the website Box Office Mojo. "Domestic" refers to revenue from the United States and Canada.

Most of these films generated a significantly higher percentage of revenue from outside North America.

Venom was biggest U.S. hit in China

The greatest shares of foreign revenue in these top 15 domestic box-office earners were achieved by Venom (75.1 percent), Bohemian Rhapsody (72.3 percent), Mission: Impossible–Fallout (72.2 percent), Jurassic World: Fallen Kingdom (68.1 percent), Hotel Transylvania 3: Summer Vacation (68.2 percent), Avengers: Infinity War (66.9 percent), and Ant-Man and the Wasp (65.2 percent).

The biggest hit in China was Venom, starring Tom Hardy, which collected US$270.1 million in that country. In the United States and Canada, the distributor generated US$213 million at the box office.

Mission: Impossible—Fallout collected US$181.1 million at the box office from China, compared with US$220.2 million in the U.S. and Canada. 

Ant-Man and the Wasp generated US$121.2 million in China compared to US$216.7 million in the U.S. and Canada.

North America's biggest hit, Black Panther, trailed all these films in China, scooping up US$105.1 million in the Middle Kingdom.

The fifth-most popular domestic film of 2018, Deadpool 2, did not generate any box-office receipts in China, according to Box Office Mojo. Despite this, the Vancouver-shot movie still collected 56.3 percent of its box-office take from foreign locations. It was led by the U.K. at US$44.6 million, followed by South Korea at US$31.8 million and Australia at US$26.7 million.

It's worth noting that another film in the top 15 in North America, Crazy Rich Asians, was a mere hiccup in China. It earned a mere US$3.7 million revenue there, including US$2 million from Hong Kong.

In fact, Crazy Rich Asians posted the highest share of revenue from the domestic box office—73.1 percent—of all the top 15 films on the Box Office Mojo list. 

Dr. Seuss's The Grinch was second in this category, capturing 60 percent of its global revenue at the domestic box office.

Movie industry linked to trade dispute

Earlier this year, Reuters reported that discussions about U.S. film distribution in China have become embedded in the broader trade talks between the two countries.

Under a 2012 agreement reached between the United States and China, 34 American films can be distributed annually under Beijing's quota system. Only a quarter of box-office receipts flow back to the studios.

The Hollywood companies are reportedly seeking a 45 percent share.

Back in 2012, entertainment lawyer Matthew Dresden, who specializes in dealing with China, wrote a blog post noting that there was a debate in that country over whether to decrease Hollywood's dominance at the Chinese box office or "propagate Chinese culture abroad". In that period, U.S. films were killing Chinese movies at the Chinese box office.

More recently—just last month, in fact—U.S. authorities suggested that China was violating a 2015 agreement to stop cyberespionage.

This resulted from a series of hacks, including one that reportedly gathered data on more than 20 million people. (For more on the cyberattacks, see this article by Vancouver writer Sandy Garossino.)

Two Chinese nationals have been charged. And China has vehemently denied wrongdoing, claiming it's being slandered.

In early December, the Trump administration and the Chinese government announced a three-month truce to give time for more talks.

As a result, Trump held off on imposing an additional US$200 billion in tariffs.

The White House said that this will provide time to discuss a range of issues, including cyber intrusions and agriculture.

Canada has its grievances with China

Since the trade truce, tensions appear to be rising, not falling—and not only between China and the United States.

Canadians are livid at China over the arrests of Kovrig and Spavor. Unlike Meng, they are stuck in prison over Christmas for reasons that have never been fully explained.

https://twitter.com/theBreakerNews/status/1077722792899108864

In the meantime, the clock is ticking on the negotiations between America and China, with a reasonable likelihood that Trump could jack up tariffs sharply.

This could easily prompt the Chinese government to retaliate with action against the U.S. film industry, perhaps by reducing the number of films that can be distributed or by changing the revenue-sharing agreement.

That, in turn, could have implications in Vancouver, given that U.S. blockbusters are sometimes either filmed in Vancouver or have visual effects and animation created at Vancouver studios.

It's not a happy prospect, especially for those who make a living in the B.C. film industry.