Background on Tariff Proposal

President Trump’s suggestion to impose a 100% tariff on foreign films sparked significant concern within Hollywood. While the film industry reacted with confusion and alarm, some legislators viewed it as an opportunity to introduce new tax incentives for domestic production.

Proposed Legislative Solutions

Representative Laura Friedman, a Democrat from Burbank, highlighted the need for a national film tax credit, stating, “I would like to refocus the conversation around a national film tax credit. We know this works.” This sentiment is echoed by Senator Adam Schiff, who is collaborating with unions and industry representatives to create a federal subsidy aimed at competing with incentives from countries such as the United Kingdom and Canada.

Bipartisan Support Efforts

Schiff and Friedman are actively seeking Republican support to form a bipartisan coalition for this initiative. Although Trump has not publicly endorsed a federal subsidy, his tariff call indicates a recognition of existing challenges in the film sector. “The Movie Industry in America is DYING a very fast death,” Trump noted on Truth Social.

Friedman remains optimistic about securing bipartisan cooperation, emphasizing the potential for Republicans to support a robust U.S. film industry that retains jobs domestically.

Industry Perspectives

While industry stakeholders acknowledge that implementing these changes will take time, they are hopeful about extending two existing tax deductions—Section 181 and Section 199—which currently offer modest support. Jon Voight, appointed as the president’s ambassador to Hollywood, has expressed backing for these deductions and proposed a federal subsidy of 10% above state incentives or 20% for states without production subsidies.

Concerns about Tariff Impacts

Representative Sydney Kamlager-Dove, a Democrat from Los Angeles, has voiced concerns regarding the detrimental effects of the tariff proposal, describing the film industry as a “nuanced and fragile ecosystem.” She pointed out that this situation has generated confusion and increased anxiety in the industry during an already tumultuous economic time.

Kamlager-Dove speculated that Trump’s tariff initiative might open the door for deeper discussions on tax incentives, particularly as several Republican-led states, such as Georgia and Louisiana, benefit from film production.

Calls for Substantial Federal Incentives

Recently, California Governor Gavin Newsom urged Trump to consider supporting a federal incentive program with a budget significantly larger than California’s existing state-level incentives—potentially exceeding $7.5 billion. This proposal aims to disproportionately benefit California, where approximately 45%-50% of U.S. production jobs are located, followed by New York and Georgia.

Details regarding Schiff’s legislative proposal are still to be confirmed, with Friedman noting ongoing discussions to finalize numbers and funding strategies.