Source: China State Council Information Office 3
California Governor Gavin Newsom announced a bold initiative on Friday to shield the state’s economy from the impacts of the U.S. tariff policies by pursuing independent trade relationships with international partners.
“Donald Trump’s tariffs do not represent all Americans,” Newsom said in a video message. “California remains a stable trading partner,” he said, directing his administration to pursue new trade opportunities globally.
The move came just two days after U.S. President Donald Trump announced sweeping tariffs, including a 10-percent “minimum baseline tariff” on all imports, with higher rates for certain trading partners, effective on April 5.
The new tariffs have drawn backlash from economies around the world, with countermeasures already pledged by some. Newsom urged the state’s “long-standing trade partners” to exempt California-made products from any retaliatory measures.
“California leads the nation as the #1 state for agriculture and manufacturing — and it’s our workers, families, and farmers who stand to lose the most from this Trump tax hike and trade war,” said the governor in a statement.
“To our international partners: As the fifth largest economy in the world, the Golden State will remain a steady, reliable partner for generations to come, no matter the turbulence coming out of Washington. California is not Washington, D.C.”
With a gross domestic product of 3.9 trillion U.S. dollars, California is the largest importer among all U.S. states, with more than 675 billion dollars in two-way trade supporting millions of jobs across the state. Its economy is 50 percent bigger than the GDP of the nation’s next largest state, Texas, according to the governor’s office.
The initiative directed the state administration to identify collaborative opportunities with trading partners that protect California’s economic interests, including workers, manufacturers and businesses, as well as broader supply chains linked to the state’s economy.
The tariffs announced by the Trump administration could result in a 2.3 percent increase in overall inflation in the United States this year, including a 2.8 percent increase in food prices and an 8.4 percent increase in automotive prices. The tariffs’ impact could cost the average household 3,800 dollars a year, according to analysis by the Budget Lab at Yale University.
Newsom is particularly concerned about the state’s agricultural sector. California produces about 80 percent of the world’s almonds, generating an industry worth approximately 5.6 billion dollars and supporting more than 100,000 jobs.
The almond industry alone contributes about 11 billion dollars in added value to California’s economy, according to industry data. About 70 percent of the state’s almond crop is exported to more than 100 economies worldwide.
Beyond agriculture, Newsom’s administration was concerned about disruptions to the state’s manufacturing sector. Manufactured goods dominate both California’s exports (87 percent) and imports (89 percent), making the state particularly vulnerable to tariff impacts.
The Port of Los Angeles, a major trade hub, anticipates a possible 10 percent decrease in cargo volume due to the tariffs, which could result in job losses in the port and related industries.
The governor’s initiative also aimed to safeguard access to critical construction materials needed for recovery efforts following the recent Los Angeles wildfires. Officials noted that current tariffs on Canadian lumber of 14 percent could rise to nearly 27 percent, hampering rebuilding efforts.
State officials also expressed concern about supply chains between California and Baja, Mexico. They argued that taxing component goods each time they cross the border will raise final product prices for Californians.
Moreover, the Sacramento Bee reported Friday that Newsom faced another serious question: “How much of a problem will tariffs be for the state’s economy, which is heavily reliant upon high-income earners, many of whom draw their wealth from stocks.”
The UCLA Anderson Forecast issued a recession watch last month, citing tariffs as one factor in a possible downturn. But there are others, notably Trump’s crackdown on undocumented immigrants, which the Forecast saw as having the potential for reducing the labor pool in the state.
Though legal experts noted that individual states do not have the constitutional authority to independently negotiate global trading deals regarding tariffs, as this power is reserved for the federal government, California has been cultivating relationships with foreign governments and officials independent of the current federal administration.
California has a history of active engagement in international trade through various agreements and initiatives. It has entered into 38 international agreements with 28 different foreign partners, according to the governor’s office.
The state government has established the International Affairs and Trade Development Interagency Committee, which advises Newsom on international trade matters and coordinates related state activities, and California maintains trade and investment desks in key markets to further its international economic objectives.
MIL OSI China News –