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Newsom’s Longshot Bid To Spare CA From Trump’s Tariff War

Contributed — Thu, 10 Apr 2025 14:00:00 +0000

CALIFORNIA — Just days after President Trump unveiled sweeping global tariffs that risk igniting a new international trade war, Gov. Gavin Newsom announced plans to shield California from the fallout by seeking exemptions for state-made goods.

“Donald Trump’s tariffs do not represent all Americans, particularly those that I represent here in the fifth-largest economy in the world, the state of California,” the governor said in a video posted to social media. “I remind all our international trading partners, California is a stable trading partner, and we hope you consider that as it relates to California-made products.”

Newsom has directed the state to pursue international trade relationships outside of the federal government. Additionally, the governor is calling on foreign governments to exempt California-made products from retaliatory tariffs the rest of the country may face as a result of Trump’s tariffs.

Trump’s plan imposes a 10 percent tariff for every nation and even higher rates for countries the president says have unfair trade relationships with the U.S.

This week, Trump raised tariffs against China to 104 percet after the world’s second-largest economy retaliated with its own set of tariffs on U.S. products. Beijing responded by announcing an 84 percent a levy on U.S. goods. The European Union favors a 25 percent tariff applied to a range of U.S. goods.

So far, no major trading partner has announced plans to spare California fromthe crossfire.

The Golden State boasts significant economic clout, as it is home to the largest agricultural production in the U.S. and some of America’s largest ports. It hosts the most Fortune 500 companies in the world and is home to over 36,000 manufacturers, employing 1.1 million people.

“It’s our workers, families, and farmers who stand to lose the most from this Trump tax hike and trade war,” Newsom wrote in his statement.

Newsom did not provide details as to how California’s independent trade deals would be pursued, but the plan is likely to further sour relations with the Trump administration.

“Gavin Newsom should focus on out-of-control homelessness, crime, regulations, and unaffordability in California instead of trying his hand at international dealmaking,” White House spokesperson Kush Desai told Politico.

However, the state wields significant leverage due to its economic stature — and this wouldn’t be the first time California used its standing to depart from Washington on international trade.

Under former Gov. Jerry Brown, California independently negotiated climate pacts with foreign entities, such as the agreement with China to cooperate on reducing greenhouse gas emissions.

California holds power because it has major ties and relies heavily on its main foreign trade partners, Mexico, Canada and China. Trump’s tariffs could become a huge disruption to supply chains along the California-Baja region.

“If these goods are taxed each time they cross the border, the price of the final product will rise and ultimately be passed on to California consumers. This will have far-reaching impacts, affecting everything from semiconductors to aerospace and automotive products,” Newsom’s office said.

The tariffs announced by Trump are predicted to result in a 2.3 percent increase in inflation this year, Newsom’s office said, citing a Yale Budget Lab analysis. That includes a 2.8 percent increase in food prices and an 8.4 percent increase in automotive prices.

It could levy $3,800 on the average household, according to the analysis.

The governor’s office warned that steep retaliatory tariffs on imported construction materials could hinder Los Angeles’ ability to rebuild after January wildfires that leveled entire neighborhoods and destroyed countless homes.

“The trade war that Donald Trump has launched is going to be felt in pretty profound ways to real people, including those who voted for Donald Trump and are now being betrayed by this very administration,” a political funding email from Newsom’s office reads.

Newsom noted that California is the nation’s largest importer and second-largest exporter, fueling a $3.9 trillion gross domestic product. He called that figure “key” to the country’s economic growth, noting that the state contributes more than $83 billion to the federal government annually.

Just how or whether California can convince international trade partners to spare the state from retaliatory tariffs remains to be seen. According to NBC7, the Governor’s Office of Business and Economic Development said the plan involved sensitive negotiations that would be detailed in the coming weeks.

Vinod Aggarwal, a professor of international political economy at UC Berkeley, told SFGATE that Newsom’s attempt to spare California could possibly work, but it isn’t likely.

“Tariffs are tariffs,” Aggarwal told the newspaper. “If he can convince countries to not tax California imports, more power to him, but I don’t believe that’s going to happen.”

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China announces tariff cuts, more competition in markets

Michael Peterson — Tue, 24 Dec 2019 23:00:53 +0000

(China announces tariff)

BEIJING (AP) — China said Monday it will reduce tariffs Jan. 1 on more than 850 foreign products including frozen pork, asthma medications and some high-tech components to spur economic development.

The announcement followed an interim trade agreement with Washington in a tariff war that has rattled financial markets.

The step adds to a series of tariff cuts over the past two years that Beijing says are aimed at improving supplies of consumer goods and encouraging competition. Chinese officials say they should not be seen as concessions to U.S. pressure.

The latest step is intended to “promote the coordinated development of trade and environment,” the official Xinhua News Agency said.

Xinhua and other state media said the temporary import tariffs would be reduced to levels lower than most-favored-nation rates.

Beijing has adopted a string of market-opening measures and tariff cuts meant to help revive economic growth that slowed to a three-decade low of 6% in the latest quarter.

The Finance Ministry said the new tariff cuts would mainly apply to products in short supply and to foreign products for daily use.

They ranged from turbine valves and other industrial components to orange juice and other commodities. Many tariffs of 5% to 10% were eliminated while higher duties of up to 65% were cut by half or more.

The duty on frozen pork was cut from 12% to 8%. That would help food companies that have boosted pork imports to replenish supplies as China contends with an epidemic of African swine fever that has devastated its pig herds.

Reducing tariffs on some types of semiconductors would help high-tech industries that the ruling Communist Party wants to become world leaders.

Also Monday, the government promised to open its oil, telecom and power markets wider to private competitors as the Communist Party tries to shore up growth in the slowing, state-dominated economy.

The Cabinet said it would give private companies equal treatment with state-owned enterprises in more industries. The announcement gave no details of ownership limits or other possible restrictions on private companies or whether foreign investors would be allowed. It said a timetable was being developed.

The statement promised to “introduce market competition” in key industries including power, telecoms, railways, oil and natural gas. It said private enterprises would be allowed for the first time to carry out basic telecoms services and invest in power generation and distribution.

Beijing has ended restrictions on full foreign ownership in electric car manufacturing and says that will extend to the whole auto industry by 2021. Regulators also have promised to allow full foreign ownership in banking, insurance and other finance businesses.

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To tariff or not to tariff

Contributed — Sat, 15 Jun 2019 11:15:38 +0000

Commercial tariffs between countries are a double edge sword. The products being imported, especially comestibles, are in demand year round – some are seasonal and some are perennials and customs tariffs upon importation make them more expensive to the ultimate consumer at the supermarket.

There is nothing more frustrating than going to buy your vegetables only to find that the price has increased, especially if your budget is limited like in the case of retirees living on a fixed income for example. Of course there are many other cases where the cost of tomatoes and other perishables ingested on a daily basis may mean the difference between eating them and not eating them.

Some argue that tariffs are protectionist measures adopted by governments to level the playing field, among other reasons. That is if the growing of lettuce is more expensive in a buying country then levying a tariff on the exporting country is necessary to make the local producers more competitive. As an example, some countries’ costs of producing lettuce are so much higher that the price to the consumer will increase anyway, possibly more than paying the 5% tariff on imported lettuce, which is the reason that vegetables are being imported to begin with. In both cases the consumer winds up paying more for his basics.

Growing your own vegetables for some is a viable option, but for most, the lack of land and space and or the inclination makes this alternative difficult at best. There is nothing more satisfying however, than going to your garden to pick your own tomatoes which traditionally have been cultivated by individual gardeners in the United States. In some parts of the country, people grow their tomatoes even on the window sill. Just go to a garden store and buy a kit for this purpose.

On the other hand, tariffs don’t always have to be a permanent burden on the consumer. Governments will use tariffs as a negotiating tool to get what is thought to be best for the country. It is argued that either you give me what I want or else. As everyone knows, however, nothing is free. The other country will negotiate and in exchange will undoubtedly come away with something that benefits them.

A case in point is the recent threat of a 5% tariff on all products coming from Mexico and as a result of negotiations between both parties the tariffs have been waived in exchange for cancelling the tariffs imposed by the United States on steel and aluminum imported from that country. And the United States gets what it wanted most which is for Mexico to place more resources at its southern border with Guatemala to contain the flow of migrants seeking asylum in this country as they pass through Mexican territory, as well as hosting these asylum seeking migrants as they are returned to Mexico while their hearings are being scheduled.

The root cause of this situation however – people leaving their home countries to come to the United States – is not being adequately addressed. We’re talking about the opportunity for employment, education, health and welfare lacking in Central America for generations.

A coalition of governments principally in North and Central America, motivated by self-interest is needed in order to foment economic development and the generation of jobs in these countries where potential migrants would prefer to remain. Were it not for desperate need, only the most courageous would willingly leave their homes, family, customs and language to venture into an unwelcoming world, to find a different kind of hardship.

While the richest countries, can tolerate, albeit with some degree of discomfort, a 5% increase in the price of food and other commodities, negating the intended effect in the event that negotiations fail, the fundamental source of the matter, illegal migration to the United States, remains unresolved.

All over the world, families lacking jobs and basic satisfiers like housing, sanitation, food and education are migrating to those places perceived to have what they lack. We can expect that this phenomenon will continue until a plan is designed and put in place to address the causes that will eliminate or reduce to a minimum the flowing of migrants seeking asylum in the United States.

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