Napa, CA – In a bid to bolster the American film industry, California Governor Gavin Newsom announced his intention to collaborate with the Trump administration on a new $7.5 billion federal tax incentive designed to counter the growing issue of “runaway production.” This initiative comes as Newsom seeks to safeguard domestic film jobs that have increasingly been drawn abroad due to competitive tax incentives offered in countries like Canada and the United Kingdom.
The proposal aims to build on the success of California’s state-level film incentives, which have already attracted significant production work to the state. “America continues to be a film powerhouse, and California is all in to bring more production here,” Newsom stated in an exclusive statement to Variety. “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 push for a federal tax incentive has long been a point of discussion within the industry. For years, industry leaders have called for a nationwide tax subsidy to help reverse the flow of film production to other countries, where favorable tax deals have enticed studios and filmmakers. While many states have implemented their own tax credit programs, federal support remains elusive.
However, Newsom’s proposal comes at a time of growing tension between California’s progressive leadership and the Trump administration. Just a day before Newsom’s announcement, former President Donald Trump criticized the state of the U.S. film industry, particularly under Newsom’s leadership. Speaking during a press conference in the Oval Office, Trump referred to the governor as “grossly incompetent” for allowing Hollywood’s film business to “slip away” to foreign competitors.
“Our film industry has been decimated by other countries, taking them out,” Trump declared. “And also by incompetence. Like in Los Angeles, the governor is a grossly incompetent man. He’s just allowed it to be taken away from, y’know, Hollywood. Hollywood doesn’t do very much of that business anymore.”
Trump’s remarks came as part of his broader critique of what he perceives as mismanagement in California. The president’s comments cast a shadow over Newsom’s call for collaboration, suggesting that, despite the governor’s willingness to work with the Trump administration, a more contentious relationship may be ahead.
The film industry, once a central pillar of California’s economy, has faced increased challenges in recent years as tax incentives in other countries, along with rising production costs, have pushed more studios to shoot abroad. From Vancouver to London, cities around the world have successfully lured major Hollywood productions, offering deals that the U.S. has struggled to match at the federal level.
While Newsom’s proposal could help bring some of those jobs back home, the path forward is uncertain. The political climate in Washington, D.C., coupled with Trump’s criticisms, could make it difficult to secure the necessary support for such a sweeping tax program.
Despite the challenges, Newsom remains optimistic about the potential for collaboration. “We want to ensure that California—and the United States as a whole—remains a dominant force in the global film industry,” he said. “We believe this new federal tax incentive will help keep us competitive on the world stage.”
As the debate continues, it remains to be seen whether a partnership between Newsom and the Trump administration is in the cards. What is clear, however, is that the future of the U.S. film industry may depend on how quickly Washington addresses the challenges of runaway production and international competition.