The initial pitches for developing a national motion picture incentive program and a proposed U.S. tariff on foreign films are getting a red-carpet reception from some industry stakeholders who hope they could help reverse a yearslong decline in American entertainment production.
“California built the film industry and we're ready to bring even more jobs home,” Gov. Gavin Newsom said on social media platform X on Monday, adding that "it's time for a real federal partnership to Make America Film Again."
In the latest strategy to help boost California's ailing film and television sector, Newsom has proposed a national film incentive program similar to California's, where movie and television makers can tap into a $330 million annual fund to help finance productions.
Newsom's pitch for a national federal fund calls for $7.5 billion in incentives to bring production back to the United States as producers increasingly choose international filming locations because of financial benefits. California and Los Angeles are in a bruising battle with other production locales for business, with overall film and television production in greater Los Angeles down 5.6% in 2024, according to FilmLA, a nonprofit group that tracks the industry.
The proposal for the first federal film incentive program comes a day after a group of Hollywood ambassadors presented their own strategies for boosting U.S. film and television production to President Donald Trump, including tariffs on productions filmed outside of the U.S. and distributed in the country, as well as production subsidies and coproduction treaties with other countries.
Victor Coleman, CEO of studio landlord Hudson Pacific, wrote in a LinkedIn post that he is "pleased to see support for the film/TV industry at the federal level" and called the proposed federal incentives along with increased state incentives "a powerful combination that is great news for Hollywood."
Hudson Pacific is completing a six-soundstage production facility at Sunset Pier 94 in New York City and owns more than 2.5 million square feet of soundstage space in Atlanta and Los Angeles. The city of Los Angeles is working with developers to streamline completion of 7 million square feet of new or upgraded space, according to the mayor's office.
Global slowdown
The tariff talk comes as Hollywood needs a reboot. On-location filming in greater Los Angeles fell 22.4% year over year in the first quarter of 2025, according to FilmLA, with TV production down more than 58% from its 2021 peak. Occupancy at Los Angeles soundstages, meanwhile, has dropped from over 90% to 63% in just two years.
Tinseltown isn’t the only place seeing declines. Global content demand has also fallen, and rival film states like Georgia and New York are looking for ways to boost business at soundstages by adding fashion shows and e-sports events to fill properties.
Meanwhile, overseas jurisdictions are offering ever-more-competitive tax write-offs to lure cost-conscious producers. The five leading locations where producers plan on filming projects in the next year are outside the United States, based on what 150 executives told industry tracking service ProdPro.
Finding a solution for the nation's slowing film business will require cross-party collaboration, according to Carl Muhlstein, founder of Muhlstein CRE and an active Los Angeles real estate professional for 30 years.
"No matter how politically opposite, survival and prospering for studios will create commonality in tax incentives, tariffs and cooperation in upcoming [merger and acquisition] consolidation," Muhlstein said. He added that he supports the effort to prioritize intellectual property in the U.S. and the new awareness on how money flows through the global supply chain of content creation.
Some critics, meanwhile, have raised concerns about the practicality of tariffs, especially because films are often coproduced and filmed in multiple locations. There's also concern that the tariffs could hinder the ability of U.S. studios to distribute their films globally, according to some union groups representing entertainment workers.
Matthew D. Loeb, president of the International Alliance of Theatrical Stage Employees, a labor union representing more than 170,000 entertainment industry professionals in the U.S. and Canada, called Monday for “a balanced federal response to return film and television jobs," adding in a statement that "any eventual trade policy must do no harm to our Canadian members — nor the industry overall. We seek reciprocal trade practices that ensure fair competition.”
Newsom's proposal to double California's film and television tax credit program is progressing toward enactment this summer. Lawmakers are trying to broaden the measure to allow productions to have a higher percentage of their costs qualify for reduced taxes.