In a plot twist no one saw coming, California Governor Gavin Newsom has signaled he’s ready to join forces with none other than Donald Trump on a potential $7.5 billion federal tax credit for the U.S. film and TV industry—a historic and eyebrow-raising move meant to counteract Trump’s proposed 100 percent tariff on all non-U.S.-made films.

After Trump’s Truth Social outburst on Sunday—where he called foreign film production a “national security threat” and demanded “MOVIES MADE IN AMERICA, AGAIN!”—Hollywood went into full panic mode. But Newsom, long a vocal opponent of Trump, pivoted fast, proposing a federal incentive modeled after California’s own plan to raise its production tax credit cap from $330 million to $750 million annually.

“America continues to be a film powerhouse, and California is all in to bring more production here,” said Newsom in a statement. “We’re eager to partner with the Trump administration to further strengthen domestic production and Make America Film Again.”

That last line might sting some of Newsom’s usual allies, but the timing is hard to ignore. With U.S. film production down nearly 40 percent over the last decade and more than a quarter of spending gone since 2022, the pressure is on to stop the bleeding. Studios have been flocking to the U.K., Canada, and Hungary to chase generous tax incentives and lower costs. But with the threat of a Trump tariff hanging overhead, producers prepping shoots in Budapest or the UK might be asking themselves: Is it worth the risk?