The Trade War between the US and China has affected both the Hollywood movie business and China's movie development. Our reporter May Lee brings us more. Just when Hollywood thought it was making progress in the 2nd largest movie market in the world - an all-out trade war is on between Washington DC and Beijing. 

DONALD TRUMP US PRESIDENT "I'm doing this to do the right thing for our country. We have been ripped off by China for a long time."

The deepening tensions between the US and China are cause for even deeper concerns in Hollywood, which has grown to rely on Chinese moviegoers and investors with deep pockets.

Before the trade war began, both countries were negotiating new terms to increase the number of American films imported to China from 34 to around 50. An increase in revenue share for US studios was also on the table. Currently it's 25%, while the international norm is 40 to 50%.

For producer Robert Cain, who works in both China and the US, the escalating trade war could turn very painful. 

ROBERT CAIN PRESIDENT OF PACIFIC BRIDGE PICTURES "Unfortunately for me it's not theoretical it's very real. I have business going on now. I'm raising money in China as I've done for quite a few years and the deals that I'm working, while we're still moving ahead, they've really been crimped by the Chinese government's reaction to what's going on, by fear on the part of the Chinese investors that I'm working with." 

Although the trade war would hit Hollywood a lot harder, Chinese entertainment companies aren't resting easy. 

JOHN LIU FOUNDER OF HAN PICTURES "The trade war will not have a winner. Everyone will hurt. It's really just a matter of who hurt most."

But there may actually be a silver lining to this rift for China's movie industry. 

JANET YANG FILM PRODUCER "Perhaps it will benefit the film industry on how to really nurture domestic talent so that could be one consequence. And maybe it will accelerate the development of these projects so that they will be more marketable to the rest of the world. People will take a beat and say let's really work on quality."

MAY LEE HOLLYWOOD "But at this point, the reality is there's still a big imbalance when it comes to Chinese movie exports versus imports into China. For example, the highest-grossing Chinese film in North America last year was Wolf Warrior 2 which pulled in just $2.7 million. Hollywood's biggest movie in China was The Fate of the Furious which made nearly $393 million. So needless to say, the US movie industry will be the bigger loser if the trade war gets even hotter. May Lee, CGTN, Hollywood."