California Gov. Gavin Newsom announced he’s got a plan to try and circumvent some of the economic impact of the tariffs. He directed the state to pursue new trade relationships and ask partners to exempt California goods from any retaliatory tariffs. NBC 7’s Shelby Bremer reports.
As the international trade war escalates and markets tumble over tariffs imposed by President Donald Trump, California Gov. Gavin Newsom on Friday announced he’s directed the state to pursue trade relationships outside the federal government, asking partners to exempt California goods from any retaliatory tariffs.
“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,” Newsom said in a video posted on social media.
“We value international trade, we value our manufacturing base, the largest manufacturing economy in the United States of America,” he continued. “We look forward to continuing to strengthen those ties, strengthen those bonds. 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’s office noted in a statement that California is the largest importer and second-largest exporter among all states, with a gross domestic product of $3.9 trillion. The state also leads the U.S. in the industries of manufacturing, technology and agriculture, his office said, noting that Mexico, Canada and China are California’s three top export destinations, valued at about $67 billion.
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When asked how the state specifically will attempt to convince international trade partners to exclude California-made products from retaliatory tariffs, which partners will be pursued, which industries will be the focus and more, the Governor's Office of Business and Economic Development said the plan involved sensitive negotiations but indicated more details would be available in the weeks to come.
The governor’s office also made special note of potential economic fallout in the border region.
“The magnitude of these tariffs on our North American allies, and the retaliation, will also result in major disruptions to cross-border supply chains, including the mutually beneficial co-production that takes place in the California-Baja mega-region,” Newsom’s office said. “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.”
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“This is Gov. Newsom's foray into international relations,” said former San Diego County GOP Chair Corey Gustafson. “Gov. Newsom wants to be president, and so this is his attempt to get in the news cycle, to take advantage of what he sees as a bad moment for President Trump.”
Gustafson said the tariffs were just the first part of Trump’s economic plan, pointing to promised tax cuts as a potential way to level out the economic impact.
“I would say to Gov. Newsom, disagree with President Trump here domestically, but don't criticize him abroad, because that only makes our country weaker,” Gustafson said.
At Ponce’s Mexican Restaurant in San Diego’s Kensington neighborhood, owner Ponce Meza made note of the tariffs’ effect on his and other small businesses.
“The biggest supplies that we get from Mexico are our avocados and our tequila,” he said. “We will try to absorb some of the cost, so the consumer doesn't have to pay for it all, but eventually the consumer will see the effects of those tariffs in higher prices.”
“We know that a lot of our guests are price sensitive, and we are sensitive to having to increase our price,” Meza continued. “But we have to to survive.”
He too said his approach is also one of waiting to see the true impact – but said he supported any effort to lighten the burden.
“Anything that our government can do, the state government can do for us will help us,” Meza said of Newsom’s announcement. “I’m hopeful that what he’s trying to do will affect us as a small business in a good way.”
