Gavin Newsom proposes $7.5 billion film tax credit to counter Trump's tariffs

On May 5, 2025, California Governor Gavin Newsom reached out to President Donald Trump to propose collaboration on a substantial federal film tax credit scheme aimed at revitalizing the U.S. film industry. This proposition comes in the wake of President Trump's alarming announcement to impose a 100% tariff on films produced outside the USA, which he claims is essential to restoring America's filmmaking prowess and protecting national interests. Newsom, recognizing the significance of a burgeoning film industry for California’s economy, emphasized the need for a robust federal partnership, stating that California has demonstrated what effective state incentives can achieve. In a Twitter post, Newsom reiterated his eagerness to work with Trump, framing his proposal around a $7.5 billion tax credit that aims to enhance domestic film production and employment. Interestingly, his proposition also appears to borrow elements from California's existing $750 million state-level tax credit, which has already proven its benefits by generating substantial economic activity. Newsom believes a similar federal initiative could solidify America’s position as a film powerhouse, given the significant competition posed by other countries offering enticing incentives to filmmakers. Trump, who has been vocal about his belief that the American film industry is deteriorating rapidly due to foreign competition, has also pointed fingers at domestic leadership failures for the decline. His recent tariff proposal is framed as an aggressive move to counteract what he perceives as a global conspiracy aimed at undermining American cultural production. Newsom, however, pointed out that such blanket tariffs could have unintended repercussions that might adversely affect both employment and the film industry. While both leaders share a common goal of promoting American film production, the path forward appears complex as they navigate negotiating terms that could lead to a significant partnership. Industry stakeholders remain attentive to how these evolving discussions may influence the landscape of U.S. filmmaking. In this context, Newsom’s initiative indicates a willingness to transcend partisan differences in pursuit of a shared economic goal, and the outcome of this partnership could have lasting implications for the future of filmmaking in America.