Trump calls for immediate action on US federal production tax credit

American president Donald Trump has signalled his interest in establishing a federal production tax credit in the US, claiming he will give his backing to the passage of legislation that could support an ailing Hollywood.

Donald Trump

Library of Congress

In a Truth Social post, Trump said that after meeting with actor Jon Voight, who has been leading a special Hollywood task force, he believes Republicans and Democrats should fast-track a bipartisan bill that would see the introduction of a first-ever federal tax credit in the US for film and TV production.

“I am going to suggest that Republicans and Democrats get together, and immediately craft Legislation to save the Movie, Television, and Entertainment Business in America. Congress should approve, immediately, a Federal Production Incentive to create Entertainment Jobs in America. It can be done quickly, accurately, efficiently and, importantly, will benefit ALL of America,” he wrote.

Trump claimed that meetings between the leaders of both major parties were being scheduled “in order to get this done.”

“[The American film and TV industry] is being dissipated in its entirety. It has moved to Canada, and other Countries, with very little work being done anymore in the United States. Hollywood is a Complete and Total Disaster! Despite the name, it is getting very little work. There is no incentive to be there, and it is hurting California very badly,” continued Trump.

Voight has championed the idea of a federal incentive ever since being appointed among three “special ambassadors” to Hollywood in January 2025. The actor first formally proposed the incentive to Trump in May 2025, though there has been little concrete action taken to date in terms of introducing legislation. Reports suggest the incentive being discussed is a 15-20% tax credit for US production labour costs.

Twice last year, Trump also floated the threat of placing tariffs on American productions filming in other jurisdictions. However, it remains unclear how such a tariff could be implemented, given the international nature of the TV and film businesses.

His latest comments come amid a bitter trade war with neighbouring Canada, which he explicitly mentioned as a beneficiary of America’s runaway production issue. Canada’s own federal tax credit programme has been hugely successful in luring American productions north of the border seeking savings from a weaker Canadian dollar as well as federal and provincial tax credits.

Around 10 days ago, Canada walked away from broader negotiations 10 days ago claiming that the US “asked too much and offered too little.” The US has since placed 50% tariffs on US$20bn of Canadian imports, with Canada responding with dollar-for-dollar tariffs.

While Trump’s reasons for putting a US federal tax credit back on the agenda remain unclear, the initiative has strong support from across the US production ecosystem.

“A federal incentive would be a landmark step toward bringing more production to local communities in all 50 states, strengthening our nation’s economy, and making our country a more competitive place to produce, create, and tell great stories,“ said the Motion Pictures Association’s chairman and CEO Charles Rivkin.

“We applaud President Trump’s support for this vital action, and we look forward to continuing to work with the White House and bipartisan leaders in Congress to enact a meaningful and effective national incentive into law.”

Democrative senator Adam Schiff also backed the introduction of a federal tax credit. “I am in strong agreement with the President,” he wrote on X. “Congress should immediately take up and pass a federal film tax incentive to bring back these good-paying jobs that we’ve lost to other countries. Let’s work together – Republicans and Democrats – to get this done, and bring the movie magic back to America.”