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"There is still a lot that we don’t know. We don’t know where it is all going to end up. Where it stands now doesn’t feel good," CEO Bob Iger told FOX Business.
"I'm not losing sleep over it. But sure it's something that as I look ahead and think about the things that I should be worried about or at least focused on that would be one of them," he added.
A breakdown in trade talks between the Trump administration and President Xi Jinping’s government has U.S. businesses preparing for prolonged tensions with China, including the possibility that the Asian nation could seek to retaliate against American businesses operating in the country.
Disney has yet to see a material impact as a result of the trade dispute, but potential issues could arise in the future, including China dialing back the number of U.S. films they allow in the country, according to Iger.
“If things get even more acrimonious it's possible that we will pay the price, so to speak,” he said. “If something happens and there [are] some tensions that create some business issues, my guess is that they'll be more short-lived.”
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China remains an important market for Disney.
The company is partnering with Guangzhou-based NetEase to create a slate of new entertainment offerings, including games and TV shows, based upon the Marvel universe.
It is also investing heavily in Shanghai Disney, including a new theme land based on the animated film “Zootopia.”
"When you go there if you’re from China, you immediately respect what is there because it doesn’t feel like just Disneyland…it feels like their Disneyland," Iger said.
Attendance at the theme park has suffered in recent quarters, however. Higher ticket sales in the second quarter of 2019 helped compensate for lower traffic, leading to flat results year-over-year. Iger told investors previously the company is not publicly discussing the potential for another location.
And the country is still a critical source of film revenue.
While box office earnings dropped 9 percent in 2018, Disney saw success with “Avengers: Endgame,” one of the highest-grossing films of all time in China and the most successful foreign movie.