News Summary

A fierce dispute has erupted between California Governor Gavin Newsom and President Trump regarding the future of the film industry. Newsom’s proposal for increasing state film tax credits aims to revitalize jobs, whereas Trump advocates for 100% tariffs on foreign films, claiming it will safeguard American jobs. The ongoing tensions reflect broader struggles within Hollywood, particularly in light of recent pandemic impacts and strikes. Lawmakers and industry figures are divided, with some supporting tax incentives while others express concerns about the ramifications of Trump’s tariffs.

California is currently at the center of a heated dispute between Governor Gavin Newsom and President Donald Trump over the future of the film industry in the United States. Newsom has proposed a significant tax credit increase aimed at revitalizing film jobs within the state, which follows Trump’s announcement of a sweeping 100% tariff on all films produced outside the U.S.

Newsom, in a post on social media, has underscored the necessity of a federal partnership to enhance the film sector, coining the slogan “Make America Film Again.” He argues that California’s rich cinematic legacy positions it to lead this revival, stating that the state is “ready to bring even more jobs home.”

The Governor’s proposal comes in the wake of substantial challenges facing the U.S. film industry. The COVID-19 pandemic dramatically impacted production levels and attendance in 2020, and recent strikes in Hollywood throughout the year 2023 further exacerbated the industry’s difficulties. Current figures show that film production has decreased by 22% in the first quarter of 2025 in comparison to the previous year, revealing a persistent struggle to return to pre-pandemic output.

As part of his broader strategy, Newsom has previously sought to elevate California’s annual film tax credit from $330 million to $750 million, an initiative he initially launched with the support of Los Angeles Mayor Karen Bass. This move reflects his commitment to bolstering the state’s economy through the resurgence of its film sector.

In contrast, Trump has taken a more adversarial approach, condemning California’s handling of the film industry and labeling Newsom as “grossly incompetent.” During an Oval Office meeting with Canadian Prime Minister Mark Carney, Trump voiced concerns about competition from foreign films, stating that they have “decimated” the American film industry due, in part, to what he perceives as Newsom’s management failures.

While the President maintains that the proposed tariffs are a necessary measure to protect American jobs and creativity, he also plans to consult with film executives to rally support for his initiatives. Trump’s criticism extends beyond the film sector, as he has also disparaged California’s High-Speed Rail project for its cost overruns and management issues, suggesting that such governance would hinder Newsom’s prospects for a presidential run.

In response to Trump’s tariff announcement, Newsom has articulated an ambition to advocate for a $7.5 billion federal tax incentive for the film industry—potentially the largest subsidy of its kind in U.S. history. This proposal aims to create a cohesive national framework for film tax incentives, diverging from the current fragmented state-by-state program that exists across the country.

Support for these initiatives is evident among some lawmakers, including California Senator Adam Schiff, who has criticized Trump’s tariffs while also expressing enthusiasm for the federal film tax credit proposal. The backlash against Trump’s tariffs was mirrored in the entertainment sector, where stocks for major studios, including Lionsgate and Warner Bros., experienced significant declines following his comments.

Late-night television hosts have also lampooned Trump’s reasoning behind the tariffs, questioning the implications for the creativity and economic sustainability of the film industry. Critics have raised alarms that such tariffs may prove counterproductive, advocating instead for a robust increase in tax credits as the more effective path toward rejuvenating American cinema.

Trump has attempted to justify the tariffs by framing foreign productions as a “national security threat” and asserting that they contribute to adverse messaging within American theaters. However, many within the industry argue that fostering local productions through tax incentives would be a more constructive approach to addressing the challenges faced by Hollywood.

The ongoing clash over these proposals underscores the complexities and challenges facing the film industry in an evolving economic landscape, with stakeholders on both sides advocating passionately for their vision of a prosperous cinematic future.