After multiple waves of tariffs, some now in effect and more being readied, a second front threatens to open up in the ongoing trade dispute between China and the U.S. — one that can only be bad for Hollywood.

Economists are openly talking about a currency war between the world’s two largest economies. U.S. Treasury Secretary Steven Mnuchin has warned that Washington is considering a formal review of whether China is manipulating its currency, the renminbi (RMB, or yuan), which has slumped by 8% in the two months it has taken for the tariffs to go from talk to reality. In May, it took 6.33 yuan to buy a U.S. dollar. On Aug. 6, despite modest stabilization measures announced Aug. 3, the Chinese currency slipped to 6.84 yuan to $1.

A weaker currency allows Beijing to mitigate the effect of President Trump’s tariffs by making imported Chinese goods cheaper in the U.S. while making American products more expensive in China. For Hollywood studios, it means that the value of their box office revenues in the Middle Kingdom has taken an 8% haircut in dollar terms.

Economists are divided about whether the devaluation of the yuan is deliberate. Some argue that the dollar has strengthened against many currencies, not just the yuan, reflecting a robust U.S. economy, climbing U.S. interest rates and the greenback’s position as a reserve currency. A more hawkish view holds that the Chinese government is undeniably in control, using the People’s Bank of China to set a trading range on a daily basis.

For now, the U.S. film industry’s reaction is fairly sanguine. “We are back to where we were two years ago, so no reason for alarm just yet,” said a Beijing-based studio executive, who was not authorized to speak officially. “But it is clear that the trade war is happening.”

Potential problems for the industry could go deeper than just devalued box office receipts. The currency shift makes it more expensive for Chinese investment in Hollywood movies, “assuming the investors are using RMB and not something like Hong Kong dollars,” said Marc Ganis, president of Chinese video platform Jiaflix and Chicago-based Sportscorp.

Some of the deals that brought Chinese money to Hollywood have already fallen by the wayside, a product of tighter credit terms and poor returns. The yuan’s new weakness makes those dollar-denominated slate deals more expensive, and it’s therefore less likely that the Chinese firms will renew them.

“If we were in normal times, this currency move should be more a short-term versus long-term issue,” said Bennett Pozil, executive VP and head of corporate banking at East West Bank, the finance house that has done the most to connect the U.S. and Chinese entertainment industries. “But now we seem to be in a period of more turbulent dialogue surrounding trade and tariffs. That may have longer impact on currency trends.”

A declining yuan raises the prospect of capital flight, with panicked Chinese investors shifting their money offshore. “If the renminbi doesn’t stabilize soon, it will happen again,” said Alex Wong, director of asset management at Hong Kong-based Ample Capital. At 6.90 RMB to the dollar, he added, “we’ll have another outflow.”

The last time that happened, Hollywood enjoyed a brief bonanza — with companies such as Wanda willing to make up the difference in exchange rate to get money out of China and into U.S. entertainment — before the deals went sour.

That rush to Hollywood is not likely to be repeated anytime soon. Many Chinese investors have begun directing their money to Western Europe instead. Moreover, entertainment remains on the Chinese State Council’s list of taboo overseas investment sectors.

A better plan might be for Hollywood to stop hoping for any kind of financial windfall from across the Pacific.

“China is not an ATM for studios to simply draw out money, either for production or from box office,” said Ganis. “We are in a new cycle now, beyond franchises, beyond co-productions. It is time to really co-develop scripts with Chinese partners, and for the world market. Chinese investors would be there for that.”