California Governor Gavin Newsom has proposed to work with the White House on a $7.5bn US federal tax credit plan to support the United States production sector.
The move comes after several frantic days in the wake of US president Donald Trump’s threat to impose 100% tariffs on non-US films in response to American productions leaving the country to benefit from competitive international incentives.
Trump walked back his proposal on Monday, although industry insiders believe the episode has spurred the Governor to act on a matter they believe he should have addressed more comprehensively before now.
“America continues to be a film powerhouse, and California is all in to bring more production here,” the Democratic Newsom said in a statement to press late on Monday. “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.”
It is understood Newsom is proposing an incentive based on California’s incentive programme, which he wants to boost by increasing the annual allocation from $330m to $750m. Separate Bills are working their way through the state legislature to increase the credit to 35% and expand the range of productions that qualify for incentives.
Newsom and Trump have clashed publicly on several occasions and would need to set aside their differences. Newsom, who presides over the world’s fourth largest economy and has been linked with a future run at the White House, criticised Trump in January for spreading what he said was misinformation about the Los Angeles wildfires. Last month California sued the Trump administration over its broader tariff declarations. Trump has attacked the Governor over his handling of the wildfires and homelessness.
Trump’s so-called “Hollywood ambassador” Jon Voight has unveiled an outline of his own proposal to support US production, which combines a federal incentive, a tax code overhaul, subsidies, international co-production treaties, and limited tariffs in certain cases. California Senator Adam Schiff, who has advocated for a federal incentive for some time, reiterated his call for a national incentive on Monday, while warning that “blanket tariffs on all films would have unintended and potentially damaging impacts”.
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