Governor Newsom Encourages President Trump to Support a $7.5 Billion Government Incentive for the Film Industry as an Alternative to Trade Taxes
Hollywood Showdown!
- Share to Facebook
- Share to Twitter
- Share to Linkedin
Top Shelf
In a surprise move, California Governor Gavin Newsom is proposing a partnership with President Donald Trump to create a whopping $7.5 billion federal incentive aimed at bolstering domestic movie production. This comes a day after Trump announced plans to slap a 100% tariff on films produced outside the States.
Lowdown
Newsom, in a statement to various news outlets, declared that America is a cinematic powerhouse, and California is more than ready to bring more film production home. The governor expressed eagerness to partner with Trump administration officials to craft a federal film tax credit program to support the entertaining industry.
Transitioning to social media, Newsom wrote in an X-post late Monday night that California has already shown what "strong state incentives" can do, and now it's time for a "real federal partnership."
Easy as Pie: Sign up for our text alert service, and stay on top of breaking news! Text "Alerts" to (201) 335-0739 or sign up here.
Tax Credit Breakdown
Newsom's proposed plan may very well mirror California's proposed $750 million a year state-level tax credit program. The state's current program, valued at $330 million a year, will be outdated if the newly proposed scheme is passed. Interestingly, Newsom hinted that former Vice President Kamala Harris would back a larger federal incentive had she been elected President.
Tariff Time
Trump's proposed 100% tariff on foreign-shot films has scholars, policymakers, and studio heads talking. In a Truth Social post on Sunday, Trump stated that his administration is ordered to impose this tariff, citing other nations' allegedly malicious intentions to lure filmmakers and studios away from the States. Unfortunately, he provided no evidence to support these claims.
Gov. Newsom vs. President Trump
When asked about the proposed tariff by reporters, Trump took a jab at Newsom, stating: "Hollywood is being destroyed... I'm not just blaming other nations, but other nations have stolen our movie industry." Newsom's office responded that they believe Trump has no authority to impose tariffs under the International Economic Emergency Powers Act, as tariffs are not listed as a remedy under that law.
Side Chatter
Earlier on Monday, Senator Adam Schiff, D-Calif., commented on Trump's tariff plan and expressed concerns about potential adverse effects on the U.S. movie industry. Schiff suggested a bipartisan effort to pass a major federal film tax credit to re-shore American jobs in the industry.
Extra Crispy
- The proposed $7.5 billion federal film tax credit would be a significant expansion compared to existing state-level programs.
- California currently allocates $330 million annually for its film tax credit program, while other states offer incentives totaling billions combined.
- California's proposed increase to $750 million annually still falls short of the proposed federal credit.
- If approved, the federal film tax credit would be the largest government subsidy program for the U.S. movie industry and aimed at boosting domestic film production.
- It would be the first federal-level film tax credit in the U.S., providing a broader framework to support the industry nationwide rather than state-specific incentives.
- The Trump tariffs on foreign-made films have sparked discussion among scholars, policymakers, and studio heads, with some expressing concern about their potential impact on the U.S. movie industry.
- Gavin Newsom, California's governor, is advocating for a federal film tax credit partnership with President Trump to launch a $7.5 billion program aimed at strengthening domestic movie production.
- In an effort to address unintended consequences, Newsom believes that Trump lacks the authority to impose tariffs under the International Economic Emergency Powers Act, as tariffs are not listed as a remedy under that law.
- As the entertainment industry and politics intertwine, the proposed partnership between Newsom and Trump could lead to an unexpected launching of a larger federal tax credit that could strengthen America's cinematic powerhouse and bolster film production across the nation.
