Politics & Government

Trade war with China could hit California hard. Here’s how.

China’s announcement Monday that it would raise tariffs on many American goods could have a significant impact on California’s economy, the latest federal data show.

President Trump said last week that the United States would raise tariffs on many Chinese imports in response to what his administration says are unfair trade practices. China responded Monday by announcing it would raise tariffs on a swath of American imports.

China is one of the largest recipients of California exports. Last year, California exported about $16.3 billion in goods to mainland China, according to the latest figures from the U.S. Census Bureau.

Another $9.9 billion in exports went to Hong Kong, a free port that is part of China. The trade war may, at least indirectly, affect exports to Hong Kong, but exactly how is complicated. U.S. law treats Hong Kong as a separate jurisdiction from China.

Exports to greater China – China and Hong Kong – last year were equivalent to almost 1% of California’s gross domestic product.

California sent more exports to greater China last year than to any other country except Mexico. It sent more exports to mainland China than any other countries except Canada and Mexico.

The value of California exports to greater China has grown by about $8 billion, or more than 40 percent, in the last decade, after adjusting for inflation. The value of exports to mainland China has grown by about $5 billion, also more than 40%.

Five sectors comprise about 70% of California’s exports to both mainland and greater China: Computer and electronics products, machinery, transportation equipment, chemicals and scrap and waste.

Phillip Reese is a data specialist at The Sacramento Bee and an assistant professor of journalism at Sacramento State. His journalism has won the George Polk and Worth Bingham awards, and he was a finalist for the 2014 Pulitzer Prize for Investigative Reporting.