Newsom asks Trump to work with him on $7.5 billion tax credit for Hollywood

The Hollywood sign in Los Angeles, on Dec. 20, 2024. The president’s call for tariffs caused confusion in Hollywood, which has seen a steep drop-off in local film and television production. (Stella Kalinina/The New York Times)

By Shawn Hubler, Matt Stevens and Nicole Sperling

A day after President Donald Trump stunned Hollywood by calling for steep tariffs on movies “produced in Foreign Lands,” Gov. Gavin Newsom of California said earlier this week that he wanted to team up with the Trump administration to craft a $7.5 billion federal film tax credit to aid the entertainment industry.

The proposal, if approved, would represent by far the largest single government subsidy program ever for the industry in the United States, and the first of its kind at the federal level. More than three dozen states already give out incentives to lure and retain film and television production, but there is no national program, as is the case in some countries overseas. And there is no single state program that gives out more than about $1 billion each year. California currently allocates $330 million annually.

“America continues to be a film powerhouse, and California is all in to bring more production here,” Newsom, a Democrat, said in a statement late Monday night. “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.”

Newsom’s proposal came in response to the president’s social media post Sunday that called for a 100% tariff on films produced outside the United States. Over the weekend, Trump met at his Mar-a-Lago club in Florida with actor Jon Voight, whom he has named a “special ambassador” to Hollywood. After that meeting he published his post, declaring: “WE WANT MOVIES MADE IN AMERICA, AGAIN!”

The president’s missive caused confusion in Hollywood, which has lost a great deal of local film and television production to states and nations that offer rich tax credits and cheaper labor. While few in the industry said that they understood Trump’s proposal, some worried that tariffs would cause more harm than good and called instead for federal help in the form of tax credits.

A tax credit modeled after California’s incentive program is essentially what Newsom is proposing, though the exact mechanics of how it would work or be enacted remained uncertain. Earlier Monday, Sen. Adam Schiff, D-Calif., said his office was working on a federal film incentive proposal.

The White House did not immediately respond Monday night to queries about Newsom’s proposal.

Voight, along with Steven Paul, his longtime manager, met with Trump and shared their plans to increase domestic film production, according to a statement from SP Media Group, Paul’s firm. They suggested federal tax incentives, changes to the tax code, co-production treaties with other nations and infrastructure subsidies, the statement said.

The proposal also included “tariffs in certain limited circumstances,” the statement said, adding that it was under review.

Voight made the rounds in Hollywood last week, meeting with the Motion Picture Association, Hollywood’s top lobbying group; various unions; and the lawmakers in California who are pushing bills to increase state tax credits for the film and television industries. State Sen. Ben Allen, a Democrat whose district includes Hollywood, met with the actor to discuss how to increase production in the state, a representative said.

Voight emerged from those meetings with two one-page documents drafted by the Motion Picture Association. One letter encourages lawmakers in Washington to adopt a manufacturing and production incentive to encourage more domestic employment. The other asks Congress to extend a section of the tax code that expires at the end of 2025 and allows certain film and television expenses to be deducted in the year they are incurred.

There was no mention of tariffs in drafts of the two documents, which were reviewed by The New York Times.

The letters were endorsed by Hollywood groups including the Producers Guild of America, the Directors Guild of America, the Screen Actors Guild-American Federation of Television and Radio Artists, the Writers Guild East, Producers United, the Independent Film and Television Alliance, and the International Alliance of Theatrical Stage Employees.

The Motion Picture Association declined to comment Monday. The association’s members include Disney, Netflix, Paramount, Sony, Universal, Warner Bros. and Amazon.

Much about Trump’s tariff effort remains unclear. What kinds of movies, exactly, would face tariffs? Would tariffs apply only to movies receiving tax incentives from foreign countries — or to any movie with scenes shot overseas? What about foreign films? Or postproduction visual effects work? Amid those and many other questions, several analysts said it was highly unlikely that a 100% tariff on all movies made overseas would materialize.

On Monday morning a spokesperson for the White House, Kush Desai, clarified that “no final decisions on foreign film tariffs have been made” but added that “the administration is exploring all options to deliver on President Trump’s directive.” Trump told reporters Monday that he planned to meet with entertainment industry representatives, adding: “I’m not looking to hurt the industry; I want to help the industry.”

The industry has been desperate for help, just not necessarily this kind.

As generous government incentives and cheaper labor have lured film and television studios to shoot many projects far from Hollywood, Los Angeles has been left in a lurch. Thousands of middle-class film workers — camera operators, set decorators, lighting technicians, makeup artists, caterers, electricians — have seen work evaporate.

In a statement Monday, the International Alliance of Theatrical Stage Employees said tens of thousands of jobs across the United States had been lost in the past two years.

“The United States needs a balanced federal response to return film and television jobs,” the union’s president, Matthew D. Loeb, said. The union praised Trump for recognizing the threat that international competition poses to domestic film industry jobs, but Loeb said that “we await further information on the administration’s proposed tariff plan.” He added that the union said it would not support a plan that would harm its Canadian members, or the industry overall.

Duncan Crabtree-Ireland, the head of SAG-AFTRA, the union that represents actors, said in a statement, “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.”