Gavin Newsom proposes $7.5 Billion federal film tax credit amid Trump’s tariff threat

Sacramento, California – In a striking turn of events for Hollywood, California Governor Gavin Newsom has voiced his support for a potential partnership with the Trump administration to bolster America’s domestic film industry. On Monday, his proposal calls for a groundbreaking $7.5 billion federal film tax credit to revitalize the U.S. entertainment sector. If approved, this initiative would represent U.S. history’s most extensive single government subsidy program for the film industry.

The proposed tax credit follows President Donald Trump’s social media post over the weekend, in which he called for steep tariffs on films “produced in foreign lands.” In the post, Trump declared, “WE WANT MOVIES MADE IN AMERICA, AGAIN!” The president’s remarks created confusion and concern within Hollywood, which has seen a significant amount of production migrate to states and countries that offer attractive tax incentives and lower labor costs.

Though the specifics of how such a tariff system would function remain unclear, Hollywood and its various stakeholders have been notably cautious in their response. Many industry professionals worry that tariffs could hurt the industry more than help it. On the other hand, Newsom’s proposal for a federal tax credit is seen by many as a more practical solution to reviving domestic production.

“America continues to be a film powerhouse, and California is all in to bring more production here,” Newsom said on Monday evening. “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.” California currently allocates $330 million annually in film and television production tax credits. Still, Newsom’s proposed $7.5 billion federal credit would dwarf this, making it the most significant government subsidy ever directed at the industry.

Over the weekend, President Trump met with actor Jon Voight at his Mar-a-Lago resort in Florida, where the two discussed ways to stimulate U.S. film production. Voight, who Trump has named a “special ambassador” to Hollywood, suggested a combination of federal tax incentives, co-production treaties with other nations, and even infrastructure subsidies. However, it was noted that tariffs were also being explored as part of the broader strategy.

In response to Trump’s social media remarks, Newsom emphasized that California is committed to supporting the film industry through state-level incentives and a robust federal partnership. His proposal aims to help the U.S. compete with other countries, many of which have already established national programs to attract film and television production.

While Newsom’s proposal garnered support from various corners of the entertainment industry, including unions and lawmakers, there is still concern about Trump’s broader tariff strategy. Senator Adam Schiff, a California Democrat, expressed caution, stating that while the administration’s attention to the issue was appreciated, a blanket tariff on foreign films could have unintended negative consequences for the industry.

On Monday, the White House clarified that they had yet to make a final decision regarding the tariff proposal, but that the administration was exploring all options. Industry experts, however, remain skeptical about the practicality and effectiveness of such a move.

“We look forward to learning more about the specifics of the plan announced by the president and to advancing a dialogue to achieve our common goals,” said Duncan Crabtree-Ireland, head of SAG-AFTRA, the union representing actors.

As California and the Trump administration navigate the complexities of revitalizing the U.S. film industry, the focus shifts towards Newsom’s proposed federal tax credit. If successful, it could mark a significant turning point for Hollywood, ensuring that more movies are made in the U.S. while providing much-needed support for the tens of thousands of workers who rely on the film and television production sector.