Tariffs will hurt California and US economy, Newsom argues on Fox News
Good morning and welcome to the A.M. Alert!
TELEGRAPHING ON TARIFFS AND TRADE
California Gov. Gavin Newsom took to Fox News this weekend to tout California’s new position as the world’s fourth-largest economy and warn that growth is imperiled by the Trump administration’s trade policies.
The state’s $4.1 trillion in gross domestic product recently edged out Japan, making California’s economy larger than every other country besides the U.S., China and Germany.
“We’ve done it by reducing (trade) barriers and delivering for American consumers,” Newsom said in ads that ran on “Fox and Friends” over the weekend. “But the Trump Administration is putting all that at risk.”
The ads were paid for by Newsom’s campaign.
President Donald Trump imposed 145% tariffs on imports from China, and threats of other tariffs – which remain paused pending trade talks – roiled markets for several weeks last month and hurt consumer confidence.
In a Friday interview with Fox Business Network’s Larry Kudlow, Newsom called the tariff rollout “chaotic,” “reckless” and “destructive,” though he said he agreed with Trump’s underlying motivations.
The Democratic governor and likely 2028 presidential hopeful praised Trump’s “instinct to bring back manufacturing” as “spot on” and noted efforts under the Democratic Biden administration to boost U.S. manufacturing.
At one point Kudlow, a former Trump economic advisor, asked “how a President Gavin Newsom” would handle trade disparities.
“That’s a hypothetical,” the governor said. “I can just say, look, I wouldn’t do it the way it’s being done. Identifying a problem is one thing, and advancing solutions and strategies in a consistent and comprehensive way, step by step, is the preferred approach.”
As one of the nation’s top importers of foreign goods, California is uniquely vulnerable to trade disruptions. And as the home to trillions of dollars in economic activity, Newsom argued any pain California’s economy weathers over trade disputes will negatively impact America’s standing as a whole.
Newsom and Attorney General Rob Bonta sued last month to stop the tariffs.
The economic uncertainty is also expected to hurt California’s state budget. While the state was projecting a roughly balanced budget in January, Newsom last month said those “projections have significantly changed.”
“With all the uncertainty with these tariffs and uncertainty with this new administration, that volatility is putting tremendous strain on our general fund,” he said.
Top state lawmakers, worried about cuts to Medicaid and other federal programs, have also sought to tie any tough upcoming budget decisions to Trump and Republicans in control of Congress.
Assembly Budget Committee Chair Jesse Gabriel said recently that lawmakers and groups lobbying for state budget dollars “should be prepared for belt tightening.”
The governor is expected to unveil his revised spending plan later this week.
QUOTE OF THE DAY
“President Trump is once again launching an illegal, unilateral attack on the most underserved Americans — this time by trying to block Congressionally directed funding meant to invest in communities and build a better future. Broadband access and digital literacy are far from luxuries. They decide who gets to participate and succeed in today’s economy.”
– Rep. Doris Matsui, D-Sacramento, after Trump announced that he is immediately ending Digital Equity Act grant funding
Best of The Bee:
Central Valley congressman was the only Democrat to back a GOP oil and gas bill, via David Lightman
Most Republican voters polled say fraud is ‘prevalent’ in California elections, via Nicole Nixon
California State Parks website contractor adds illegal junk fees, lawsuit claims, via William Melhado
Housing for formerly incarcerated adults coming to former Sacramento motel, via Theresa Clift