Disney Headlines for April 15th, 2025
The United States has effectively started a trade war with China.
Do you know which business this decision impacts the most? Well, you’re reading a Disney fan site, so…
Magic Kingdom
We’ll assess the possible damage in this week’s Disney Headlines.
Disney’s New Problem
Sharon Waxman is the founder of The Wrap, as well as a former correspondent for the Washington Post and New York Times.
While she probably wouldn’t know me from Adam, we tend to think alike when it comes to major media issues.
Cinderella Castle in Magic Kingdom
During my vacation, I noted that Waxman’s wheels started spinning around the same time mine did.
The writer penned this piece about Disney’s potential exposure due to a tariff war between the United States and China.
Photo: Disney
You may be wondering why both of us are fixated on Disney. I’ll explain with two simple examples.
The first is that on the day when China and America announced tariffs of more than 100 percent against one another, Disney operated five theme parks.
Photo: DIsney
Two of them were in the United States, one was in France, and the other two were in…China.
Basically, these new tariffs meant that Disney’s Chinese and American operations were suddenly in direct conflict.
Photo: Disney
That interpretation is a bit glib, but it’s also accurate, at least in the broad strokes.
As a second example of the weirdness, Disney was one of just a handful of international studios with films playing in China.
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CEO Bob Iger holds a respectful relationship with several Chinese politicians, ones he forged during theme park construction.
First, Iger interacted with the local government while building Hong Kong Disneyland.
Hong Kong Disney
Later, as his own autobiography recounts, Iger repeatedly visited China during the creation of Shanghai Disneyland.
On the American front, Iger worked with the current American President, Donald Trump, as part of a pandemic business recovery group.
Photo: Disney
As a powerful media CEO, Iger has built a network of contacts across the world.
Still, the past few days have been different, and he knows it. Somehow, the problem is even worse than most realize, too.
Disney’s Perplexing Position
Please take a moment to consider how many Disney toys and other pieces of merchandise you have lying around your house.
Now, think about the stickers that display where those items were made.
Emporium in Magic Kingdom
Virtually every manufactured item lists its place of origin somewhere, and you know where I’m going with this.
From a young age, we learn that many of these toys come from Asia, where labor is cheaper.
Disney’s Yacht Club Resort Merchandise
Companies like Disney maximize profits by picking job sites that can make toys as cheaply as possible.
You can imagine what a sudden tariff of 100+ percent does to the expense of making said merchandise. Yeah, it’s not great.
Photo: Washington Post
As one of the foremost merchandising companies in the world, Disney finds itself staring down the barrel of misfortune.
Waxman recognized this fact and asked Disney for specifics. Here’s the applicable text:
“Some significant portion of that merchandise is produced in China, although a Disney executive pointed out that the entertainment giant has 500 manufacturers in the United States, and merchandise being made at 10,000 factories around the world. That remains to be seen, but is certainly a concern. A Disney executive said that this is a manageable issue.”
New EPCOT Merchandise
I generally don’t quote so much of an author’s work, but it’s essential here. Waxman has tapped into Disney’s new reality.
While the company absolutely does have manufacturers around the world, we all know that many come from China.
Emporium in Magic Kingdom
To cover the sudden change in manufacturing costs, Disney can either raise prices or face a reduction in profit margins.
That’s the crux of this week’s Headlines right there. The problem with being a properly diversified multinational conglomerate is suddenly visible.
Photo: skillastics.com
Disney’s former strength, inexpensive international labor, suddenly makes the next few earnings reports a bit scary.
How High Is the Water?
There’s a West Wing quote I think about far too often where one of the characters, C.J. Cregg is asked a question.
A friend knows she’s in trouble and asks whether the water is over her head, symbolizing that she’s drowning.
Photo: Disney
The character replies, “No, the water is exactly at my head.” I’m thinking about that because Disney’s doing the same calc now.
Currently, Disney earns income via international box office from China, merchandise manufactured in China, and theme parks in China.
Photo: Disney
I could go on, but you get the point. Disney owns more than 40 percent of Shanghai Disneyland and Hong Kong Disneyland.
The company’s biggest film this year, Avatar: Fire and Ash, is a sequel to Avatar: The Way of Water.
Photo: Disney
That film earned $246 million in China, which is 10.6 percent of its total box office revenue.
And there’s another issue I haven’t even discussed yet. Disney Cruise Line is currently expanding.
Photo: Disney
The fleet will more than double from now through 2031. So, plenty of shipbuilding is underway.
Do you know what ships need? Steel. Do you know who supplies Disney with the steel for its cruise ships? Yeah, it’s China.
Photo: Disney
That same steel costs 25 percent more today than it did two weeks ago.
In simplest terms, if Disney needed $100 million worth of steel, it suddenly costs $125 million.
Disney Treasure
Folks, I don’t want to beat you over the head with all this, but it is BAD!
Disney’s exposure here rivals that of any non-tech company in America.
Photo: Disney
So, when we wonder how high the water is, let’s just say Disney needs at least a swimsuit and maybe Scuba gear. Stay tuned.
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