With Hollywood reeling from the potential cataclysmic effects of Donald Trump’s calls for 100 percent tariffs on non-U.S. produced movies, California Gov. Gavin Newsom sprung into action on Monday evening, proposing a team up with The White House on a $7.5 billion federal film tax credit scheme to provide relief to the entertainment industry.
Newsom’s proposal would see the federal government step in to boost film and TV production in the U.S. by modelling the tax credit on California’s own proposed $750 million state level program. California lawmakers are currently aiming to increase the cap on its production tax credit program from $330 million to $750 million a year, vastly boosting the credit to 35 percent while expanding the category of productions that qualify to include shorter TV shows, animated titles and certain types of unscripted projects.
A potential federal tax credit scheme, ten times the size of a Californian initiative, would be the first such subsidy for the entertainment industry and provide a more unified American response to attractive subsidies provided by countries such as Canada and the U.K. which have been adept at luring lucrative Hollywood productions in recent years.
“America continues to be a film powerhouse, and California is all in to bring more production here,” Newsom said in a statement to The Hollywood Reporter. “Building on our successful state program, we’re eager to partner with the Trump administration to further strengthen domestic production and Make America Film Again.”
It is still unclear how the proposed $7.5 billion federal tax credit would work, as no details have been shared, but Newsom signaling he would work with Trump is a major first step forward given their personal history. Trump’s relationship with Newsom is combative, and the two have clashed repeatedly since the latter became California’s governor in 2019, including over hot-button issues such as immigration, COVID-19 response and climate crisis. Trump has also taken personal jabs at Newsom over his handling of homelessness and the wildfires in California. Newsome, likewise, has pushed back hard against Trump, and most recently slammed the president for spreading misinformation about the wildfires.
Newsom’s tax credit gambit comes as the global film industry is still trying to process Trump’s calls for a “100 percent tariff” on any movies coming into the U.S. that were not produced in this country. The president posted on his Truth Social platform Sunday that he’s authorized the Department of Commerce and the United States Trade Representative to institute the tariff.
“The Movie Industry in America is DYING a very fast death,” Trump wrote. “Other Countries are offering all sorts of incentives to draw our filmmakers and studios away from the United States. Hollywood, and many other areas within the U.S.A., are being devastated. This is a concerted effort by other Nations and, therefore, a National Security threat. It is, in addition to everything else, messaging and propaganda!
“Therefore, I am authorizing the Department of Commerce, and the United States Trade Representative, to immediately begin the process of instituting a 100% Tariff on any and all Movies coming into our Country that are produced in Foreign Lands. WE WANT MOVIES MADE IN AMERICA, AGAIN!”
Talking with C-SPAN on Sunday, Trump was asked about the tariffs, and he briefly expounded upon his post and put some of the blame on Newsom in addition to other countries.
“What they’ve done is other nations have been stealing the movies, the moviemaking capabilities from the United States,” he said, adding: “I’ve done some very strong research over the past week, and we’re making very few movies now. Hollywood is being destroyed. Now, you have a…grossly incompetent governor that allowed that to happen, so I’m not just blaming other nations, but other nations have stolen our movie industry. If they’re not willing to make a movie inside the United States, then we should have a tariff on movies that come in. And not only that, governments are actually giving big money. They’re supporting them financially. That’s sort of a threat to our country in a sense.”
Asked for comment, a spokesperson in Newsom’s office said later on Sunday: “Looks like it’s distraction day again in Washington, D.C.”
