Governor Gavin Newsom pleaded with foreign trading partners on Friday to consider exempting California from their potential retaliatory tariffs in response to the Trump administration’s new tariffs set to take effect in the coming days.
California, the world’s fifth largest economy, makes up 14 percent of the U.S. gross domestic product. The state’s economy will be particularly hurt by foreign nations’ tariffs on U.S. products, considering manufactured goods account for 87 percent of the state’s total exports.
Newsom announced he directed his administration to explore “new opportunities” with key trading partners and emphasized that California is not the same as Washington, D.C., in an appeal to world leaders.
“Donald Trump’s tariffs do not represent all Americans, particularly those I represent here in the fifth largest economy in the world, the state of California,” he said in a video. “California is a stable trading partner, and we hope you consider that as it relates to California-made products.”
California is the leading state for the nation’s agricultural and manufacturing sectors, as well as home to the most Fortune 500 companies ahead of Texas and Florida.
California’s key trading partners are Canada, Mexico, and China — the last of which is planning to place a 34 percent retaliatory tariff on American imports next week to match President Donald Trump’s new tariff rate on China. The steep U.S. tariff adds to the pre-existing 20 percent tariff on Chinese goods.
More than 40 percent of California’s imports originate from those three countries.
The Democratic governor’s administration is concerned about the impact that retaliatory tariffs would have on farmers and the state’s efforts to rebuild homes after the raging wildfires that engulfed parts of Los Angeles in January. Construction materials, such as steel and aluminum, are hit by tariffs.
It remains unclear how exactly Newsom is planning to exempt California from foreign tariffs.
The governor is unable to negate or override Trump’s tariffs, as the Constitution forbids states from enacting tariffs on imports or exports without express approval from Congress.
The White House criticized Newsom’s appeal, saying he should be more concerned about certain issues in California.
“Gavin Newsom should focus on out-of-control homelessness, crime, regulations, and unaffordability in California instead of trying his hand at international dealmaking,” said White House spokesman Kush Desai.
While Trump claims tariffs will help boost domestic manufacturing and bring jobs back to the U.S., some Democratic and Republican lawmakers alike are worried about the unprecedented tax hike on American consumers that they bring. Senator Mark Warner (D., Va.) warned the country could face the largest tax increase in U.S. history, and Senator John Kennedy (R., La.) said he is unsure of the short-term and long-term economic impacts of tariffs.
“Tariffs are like whiskey,” Kennedy told Fox News. “A little whiskey under the right circumstances can be refreshing. Too much whiskey under the wrong circumstances and you end up drunk as a goat. We just don’t know right now. But we’ll know within the next six months. If it works, let’s take a dozen. If it doesn’t work, the president will have to recalibrate.”
The stock market is also tumbling in response to Trump’s tariff plan, fueling fears of a global recession and rising inflation. The Dow Jones Industrial Average plummeted more than 2,200 points on Friday, while the S&P 500 index ended the week down 9 percent — its worst week since the onset of the Covid-19 pandemic in March 2020.
The baseline 10 percent tariffs take effect on Saturday, and the varying “discounted reciprocal tariffs” go into effect next Wednesday. The 25 percent auto tariffs started Thursday.