Napa, Calif. — As President Donald Trump’s aggressive new tariff plan threatens to escalate into a full-scale global trade war, California Governor Gavin Newsom is taking an unprecedented step: attempting to carve out a separate economic path for the state he leads.
In a video posted to social media this week, Newsom announced that California will seek exemptions for its state-made goods from international retaliatory tariffs, a move aimed at protecting California’s vast economy and millions of workers from what he described as a “Trump tax hike.”
“Donald Trump’s tariffs do not represent all Americans, particularly those that I represent here in the fifth-largest economy in the world,” Newsom said. “California is a stable trading partner, and we hope you consider that as it relates to California-made products.”
The governor’s plan calls for California to pursue international trade relationships independently of the federal government. He has directed the Governor’s Office of Business and Economic Development to begin outreach to foreign governments, encouraging them to exempt California exports from sweeping tariffs aimed at the U.S. as a whole.
President Trump’s recent tariff initiative includes a blanket 10 percent tax on imports from all countries, with significantly higher rates—up to 104 percent—targeting nations he accuses of unfair trade practices, such as China. In response, Beijing imposed its own 84 percent levy on American goods, while the European Union is weighing a 25 percent tariff on a broad range of U.S. products.
So far, no foreign government has signaled an intention to exempt California from these countermeasures.
California’s economy, the largest of any U.S. state, is particularly vulnerable to global trade fluctuations. The Golden State is the country’s top agricultural producer, a major manufacturing hub, and home to some of the nation’s busiest ports. According to Newsom’s office, over 36,000 manufacturers in the state employ more than 1.1 million people, many of whom depend on cross-border supply chains, especially with neighboring Mexico and China.
“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,” a statement from the governor’s office warned.
A Yale Budget Lab analysis cited by the state projects that the tariffs could lead to a 2.3 percent jump in inflation this year, including a 2.8 percent rise in food prices and an 8.4 percent spike in the cost of automobiles. The average California household could face an additional $3,800 in expenses annually as a result.
Construction costs are also expected to surge due to tariffs on imported building materials, a development that could hamper wildfire recovery efforts in areas like Los Angeles County, which are still rebuilding after devastating fires in January.
In a fundraising email to supporters, Newsom blasted Trump’s policy as a betrayal of working Americans. “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,” the email read.
The White House dismissed Newsom’s maneuvering. “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 spokesperson Kush Desai in a statement to Politico.
This isn’t the first time California has defied Washington on international matters. Under former Governor Jerry Brown, the state negotiated separate climate agreements with countries such as China and Canada. Newsom appears to be following that precedent, leveraging California’s $3.9 trillion GDP and status as the nation’s second-largest exporter to argue for special treatment.
The Governor’s Office of Business and Economic Development has indicated that specific details of the plan are still in development and will be released in the coming weeks, citing the sensitivity of ongoing discussions.
Whether California’s efforts will succeed in securing trade carve-outs remains uncertain. But the state’s assertive posture signals that tensions between Sacramento and Washington are likely to deepen as economic and political stakes rise.