Tom Philp: The trouble with Newsom's ploy to spare California in Trump's trade war

Tom Philp, The Sacramento Bee on Apr 10, 2025

Published in Op Eds

By clicking submit, I authorize Arcamax and its affiliates to: (1) use, sell, and share my information for marketing purposes, including cross-context behavioral advertising, as described in our Privacy Policy , (2) add to information that I provide with other information like interests inferred from web page views, or data lawfully obtained from data brokers, such as past purchase or location data, or publicly available data, (3) contact me or enable others to contact me by email or other means with offers for different types of goods and services, and (4) retain my information while I am engaging with marketing messages that I receive and for a reasonable amount of time thereafter. I understand I can opt out at any time through an email that I receive, or by clicking here

Gov. Gavin Newsom has the right political instincts as he seeks to insulate California from the potential economic catastrophe of a tax war on global trade, seeking to spare the state from retaliatory tariffs. Unfortunately, it just won’t work.

Sadly for California, this is a moment when Newsom would actually have to be the president to effect change. As big as we are, California is not an island when it comes to trade. Our ports unload an estimated 40% of all containers that arrive in this nation from somewhere else. And nobody really tracks where it ends up.

“The governor’s proposals are unworkable,” said Jock O’Connell, a Sacramento based international trade advisor for Beacon Economics. “They just can’t be implemented.”

It may sound warm and fuzzy to California-centric die-hards that we’re somehow special when it comes to trade. Newsom’s comments definitely embody that superiority complex that can sometimes shine in the Golden State.

“Donald Trump’s tariffs do not represent all Americans,” Newsom said last week. “We value international trade. We value our manufacturing — the biggest manufacturing base in the United States of America. We look forward to continuing to strengthen those ties, strengthen those bonds.”

Yet we should expect to pay higher tariffs right alongside Arizona and Texas. Why? To amend a familiar saying, what happens in the Port of Los Angeles doesn’t stay in Los Angeles.

Behind all these goods moving through California ports and airports are only limited statistics, said O’Connell, the rare economist with a sense of humor. When a product leaves California for somewhere else, some staffer fills out a form that doesn’t specify where the good was actually made. It only specifies precisely where the product left the state.

And don’t bet the ranch on the accuracy of these export forms “The person filling out the form is usually one of the least senior people in the organization,” O’Connell said. “They have better things to do to ensure that the forms are accurate.” Analyzing these forms can spot trends in trade, but that’s about it.

There are only a handful of goods leaving California ports that a shipping entity can assume came from here — “almonds, pistachios and walnuts,” O’Connell said. But it’s naive to think that a foreign country would give these California products a break despite Newsom’s best lobbying. These are products where you can punish Trump supporters with a high degree of accuracy by imposing retaliatory tariffs on them.

These nuts are “grown in basically red counties in central California,” O’Connell said. “As such, they are likely to be targeted by other countries looking for products that are politically sensitive.” That means a much greater prospect of a higher tariff on products like these, not lower ones.

It’s already happening: China, for example, has imposed a 35% tariff on California almonds. Its leaders aren’t fixated on the governor’s podcasts beaming from Marin County. “The Chinese have had a history of identifying who’s got power in Washington, who can influence the president,” O’Connell said. “They’re not looking at Gavin Newsom.”

Newsom does, however, have two other options that could result in California fairing better with trade partners like China and others who are now targets of Trump.

“If we are an independent nation, we could set our own tariffs,” O’Connell said. Then, President Newsom could begin to require all exporting facilities to document which goods come from our nation or elsewhere.

“The glory of being your own nation, (is) you can produce your own statistics,” O’Connell said.

If California wanted lower tariffs yet didn’t have the stomach for nationhood, we could always become a province of, say, Canada. And what’s preventing a larger Canada from forging closer ties with a northern neighbor of Newfoundland coveted by our current president, Greenland?

Prospects of such true tariff relief any time soon are as likely as Newsom’s trade overtures. Our president’s decision to increase taxes on the goods of other nations will resonate as a tax increase felt here and throughout the world. California, like every other state, is along for this rockiest of rides.

_____