by Kelsey Ables
Special to The Washington Post
California Gov. Gavin Newsom (D) is offering to partner with the Trump administration to create a federal film tax credit program worth at least $7.5 billion to boost domestic film production, his office said late Monday. The proposal came after President Donald Trump set Hollywood on edge by calling for massive tariffs on foreign-made films to address what he described as the “DYING” American film industry.
If the proposal comes together, it would be the largest government tax initiative for the film industry in U.S. history and the first such program at the federal level, a spokesperson for Newsom’s office said.
“America continues to be a film powerhouse, and California is all in to bring more production here,” Newsom said in a statement.
He added that California is “eager to partner with the Trump administration to further strengthen domestic production and Make America Film Again.”
The White House did not immediately respond to a request for comment.
Newsom, a fierce Trump opponent, is making the request at a time when tariffs have upended the global economy and sowed uncertainty across many industries. Newsom sued the Trump administration last month to block the president’s sweeping tariffs, arguing they are causing irreparable harm to California’s economy.
Trump’s call Sunday night for 100 percent tariffs on films produced overseas, in which he described foreign films as a national security threat, puzzled insiders in the highly globalized industry as to its implications. It was not clear how such tariffs would be applied or how they might affect U.S. films shot overseas or involving production abroad, The Post reported.
Andrew deWaard, an assistant professor at the University of California at San Diego who studies the relationship between culture and commerce in the film industry, said the program proposed by Newsom on Monday is “highly unlikely” to go into effect.
“I can’t imagine in such a partisan atmosphere that Trump would want to be seen subsidizing California entertainment workers just as the tariffs are starting to negatively affect U.S. factory workers, farmers, truckers, etc.,” he said in an email.
“I think Newsom is calling Trump’s bluff,” he added. “… If Trump balks, which is likely, then Newsom can say he tried to be bipartisan.”
Newsom’s office described the proposed federal tax credit as a way to bolster American stories, create U.S. jobs and benefit the industry’s behind-the-scenes workers such as set builders and electricians.
The proposal would be modeled after California’s Film and Television Tax Credit Program that Newsom’s office said has generated more than $26 billion in economic activity and supported thousands of jobs across the state since its inception in 2009.
But there is debate over the effectiveness of such film tax credits. In testimony to the state’s Senate Revenue and Taxation Committee this year, Michael Thom, a professor at the University of Southern California who has researched tax incentives for film and television production, said such initiatives “fail to stimulate enough economic activity to justify their substantial cost.”
—Video Embed CodeVideo: President Donald Trump said on May 4 that he wants tariffs on all foreign-made movies, saying other countries have “stolen” the American film industry.Special to The Washington PostEmbed code: <iframe src=”https://www.washingtonpost.com/video/c/embed/662124b0-34f3-4d95-8d00-8f49b4747d37?ptvads=block&playthrough=false” width=”480″ height=”290″ frameborder=”0″ webkitallowfullscreen mozallowfullscreen allowfullscreen></iframe>
