Newsom offers to work with Trump on $7.5 billion tax credit proposal to boost US films
SACRAMENTO, Calif. (KABC) -- Gov. Gavin Newsom asked President Donald Trump to work with him on a $7.5 billion tax credit plan to boost production of U.S. films after the president announced a 100% tariff "on any and all Movies coming into our Country that are produced in Foreign Lands."
"California built the film industry - and we're ready to bring even more jobs home," Newsom said Monday in a post on X. "We've proven what strong state incentives can do. Now it's time for a real federal partnership to Make America Film Again. @POTUS, let's get it done."
The governor's proposal came after Trump on Sunday wrote on his Truth Social program: "The Movie Industry in America is DYING a very fast death," he wrote, complaining that other countries "are offering all sorts of incentives to draw" filmmakers and studios away from the U.S. "This is a concerted effort by other Nations and, therefore, a National Security threat. It is, in addition to everything else, messaging and propaganda!"
The president did not immediately respond to Newsom's proposal.
Last October, Newsom proposed expanding California's Film & Television Tax Credit program to $750 million annually, up from $330 million.
Meanwhile, the International Brotherhood of Teamsters, the union that represents casting professionals, drivers, animal trainers and other film industry workers, expressed support for Trump's tariff plan.
"For years, Hollywood studios have hollowed out the industry by following Corporate America's crooked playbook of outsourcing good union jobs. Studios chase cheap production costs overseas while gutting the American workforce that built the film and TV industry," the union said in a statement. "These gigantic corporations line their pockets by recklessly cutting corners, abandoning American crews, and exploiting tax loopholes abroad. While these companies get rich fleeing to other countries and gaming the system, our members have gotten screwed over.
"The Teamsters Union has been sounding the alarm for years. If studios want to benefit from American box offices, they must invest in American workers," the statement said. "We thank President Trump for boldly supporting good union jobs when others have turned their heads. This is a strong step toward finally reining in the studios' un-American addiction to outsourcing our members' work."
It's common for both large and small films to include production in the U.S. and in other countries. Big-budget movies like the upcoming "Mission: Impossible - The Final Reckoning," for instance, are shot around the world.
Incentive programs for years have influenced where movies are shot, increasingly driving film production out of California and to other states and countries with favorable tax incentives, like Canada and the United Kingdom.
Yet Trump's tariffs are designed to lead consumers toward American products. And in movie theaters, American-produced movies overwhelmingly dominate the domestic marketplace.
China has ramped up its domestic movie production, culminating in the animated blockbuster "Ne Zha 2" grossing more than $2 billion this year. But even then, its sales came almost entirely from mainland China. In North America, it earned just $20.9 million.
In New Zealand, where successive governments have offered rebates and incentives in recent years to draw Hollywood films to the country, the film industry has generated billions of dollars in tourism revenue driven by the "Lord of the Rings" and "Hobbit" films, which featured the country's pristine and scenic vistas. More recently, the blockbuster "Minecraft" movie was filmed entirely in New Zealand, and U.S. productions in 2023 delivered $1.3 billion New Zealand dollars ($777 million) to the country in return for NZ$200 million in subsidies, according to government figures.
The Motion Picture Association, which represents major U.S. film studios and streaming services, didn't immediately respond to messages Sunday evening.
The MPA's data shows how much Hollywood exports have dominated cinemas. According to the MPA, the American movies produced $22.6 billion in exports and $15.3 billion in trade surplus in 2023.
Trump, a Republican, has made good on the "tariff man" label he gave himself years ago, slapping new taxes on goods made in countries around the globe. That includes a 145% tariff on Chinese goods and a 10% baseline tariff on goods from other countries, with even higher levies threatened.
By unilaterally imposing tariffs, Trump has exerted extraordinary influence over the flow of commerce, creating political risks and pulling the market in different directions. There are tariffs on autos, steel and aluminum, with more imports, including pharmaceutical drugs, set to be subject to new tariffs in the weeks ahead.
Trump has long voiced concern about movie production moving overseas.
Shortly before he took office, he announced that he had tapped actors Mel Gibson, Jon Voight and Sylvester Stallone to serve as "special ambassadors" to Hollywood to bring it "BACK - BIGGER, BETTER, AND STRONGER THAN EVER BEFORE!"
U.S. film and television production has been hampered in recent years, with setbacks from the COVID-19 pandemic, the Hollywood guild strikes of 2023 and the recent wildfires in the Los Angeles area. Overall production in the U.S. was down 26% last year compared with 2021, according to data from ProdPro, which tracks production.
The group's annual survey of executives, which asked about preferred filming locations, found no location in the U.S. made the top five, according to the Hollywood Reporter. Toronto, the U.K., Vancouver, Central Europe and Australia came out on top, with California placing sixth, Georgia seventh, New Jersey eighth and New York ninth.
The problem is especially acute in California. In the greater Los Angeles area, production last year was down 5.6% from 2023 according to FilmLA, second only to 2020, during the peak of the coronavirus pandemic.
The Associated Press contributed to this report.
