President Trump recently called for a 100 percent tariff on movies produced outside the United States, sparking confusion and concern in Hollywood. In response, California Governor Gavin Newsom proposed a $7.5 billion federal film tax credit to support the entertainment industry. Newsom’s plan aims to boost domestic film and TV production by offering substantial tax incentives, similar to California’s state-level program, which is set to increase its cap from $330 million to $750 million annually.
The proposal would be the largest government subsidy for the industry in the United States and the first federal initiative of its kind. More than three dozen states already offer incentives to attract film and television production, but there is currently no national program.
Governor Newsom expressed eagerness to partner with the Trump administration, stating, “America continues to be a film powerhouse, and California is all in to bring more production here.” He emphasized the need for a federal partnership to “Make America Film Again.”
While Trump’s tariff proposal has left many in the industry puzzled, Newsom’s tax credit plan has garnered support from various Hollywood groups and unions. The Hollywood Reporter noted that the plan could provide a unified American response to international subsidies that have lured productions away from the U.S.
The White House has not yet made a final decision on the tariff proposal, and President Trump plans to meet with industry representatives to discuss the matter further. However, industry experts warn that implementing such tariffs could lead to significant challenges and potential retaliation from trade partners. CNN reported that while Trump’s tariff announcement was met with skepticism, the proposal highlights ongoing concerns about “runaway production” and the need to support domestic filmmaking.
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