[Source/Observer Network, Liu Chenghui] The "reciprocal tariff" policy of the Trump administration has caused huge shocks in the global market. Gavin Newsom, the Democratic governor of California, quickly made a statement to distance himself. On the morning of April 4, Newsom announced that California would establish a "strategic relationship" with countries that plan to retaliate against the United States, urging these countries to exclude products manufactured in California from retaliatory tariffs. He emphasized that Trump does not represent all Americans, especially the residents of California. Californians support stable global trade relations.

California is an important agricultural and economic state in the U.S., with a large proportion of agricultural product exports. It has close trade relations with Mexico, Canada, and China. Fox News believes that Newsom is concerned that Trump's new tariffs will cause "significant disruptions" to California's cross-border supply chains, affecting the import of construction materials such as steel, aluminum, and timber, and hindering the reconstruction work after California wildfires. The New York Times reported that Newsom's plan may further intensify the hostility between California and the Trump administration.

Earlier on the morning of April 4, Newsom announced this plan in a press release and a brief video, but he did not elaborate on how the plan would be implemented.

Newsom delivered a video statement

In a video statement, Newsom said, "Donald Trump's tax increase does not represent all Americans, especially those I represent here—people from the fifth largest economy in the world, California. California supports stable global trade relations, and we hope you remember this when considering products made in California."

He added that he had instructed the California government to seek new opportunities to "expand trade," emphasizing that California remains a stable partner now and in the future.

Newsom also wrote in an email, "Donald Trump's trade war will profoundly affect ordinary people, including those who voted for Trump but are now betrayed by his administration."

The office of the Governor of California stated in a press release, "If taxes are levied every time goods cross borders, the final product prices will rise and ultimately be passed on to consumers in California. This will have far-reaching impacts, affecting various sectors from semiconductors to aerospace and automotive products."

California is the largest agricultural production state in the U.S., calling itself the "fifth largest economy in the world." Its economy is 50% larger than that of Texas, and it is also the state with the most Fortune 500 companies in the U.S. State officials said that California is the largest import state and the second-largest export state in the U.S., with over $675 billion in trade supporting millions of jobs.

In 2022, the state's agricultural exports reached $23.6 billion, with almonds, dairy products, pistachios, wine, and walnuts being major export products. According to data from the California Department of Food and Agriculture, almonds are the most valuable export product in California, accounting for about 20% of the state's agricultural export sales and 2.5% of its total exports. California supplies 80% of the world's almond supply, and most of the almond crops are exported.

In terms of imports, California has close trade relations with China, Mexico, and Canada. Nearly half of the state's imported products come from these countries. In 2022, the total import value from these three countries amounted to $203 billion out of the state's total imports of more than $491 billion.

On January 24, during the spread of California wildfires, Governor Newsom met with Trump at Los Angeles International Airport. Reuters

The California government is concerned that retaliatory tariffs imposed by countries providing key rebuilding materials such as timber, steel, and aluminum could hinder the reconstruction work after Los Angeles wildfires.

A California government official stated that Trump's new tariffs will hinder California's access to critical rebuilding materials. Currently, the U.S. imposes more than 14% tariffs on Canadian timber, which may rise to nearly 27% by 2025.

In response to Newsom's remarks, White House spokesperson Kush Desai said that Newsom should focus on solving California's out-of-control homeless population issues, crime, regulations, and high prices instead of playing politics in international trade matters.

However, according to the U.S. Constitution, states do not have legal authority to independently negotiate or conclude global trade agreements on tariff issues. Trade policies, including tariffs, are reserved powers of the federal government. Specifically, Article I, Section 8 of the U.S. Constitution grants Congress the power to manage trade with foreign countries, including the power to levy tariffs and negotiate trade agreements.

The New York Times reported that Newsom's latest statement may further exacerbate the hostility between California and the Trump administration. The Trump administration has already initiated multiple investigations and legal challenges against California. Last week, the Trump administration launched a series of investigations and policy adjustments against California within 24 hours, involving sensitive areas such as transgender student rights, education for undocumented immigrants, and affirmative action admissions, sparking strong backlash from California politicians.

After Trump unveiled the so-called "reciprocal tariff" list on April 2, U.S. stocks were "bloodied" on April 3, with the three major indices experiencing their largest single-day decline in nearly five years. However, Trump insisted that despite the tariff impact on the market, the stock market would still "prosper." Trump also posted on social media comparing the U.S. to a "patient," with "reciprocal tariffs" being "surgery," and stating that "the surgery is over, and the patient survived."

Bloomberg reported on April 2 under the title "Under Trump's Tariff Policy, the U.S. Becomes the Biggest Loser in the Market," stating that Trump's tariff policies have shaken the global trade system, but they have caused more damage to U.S. assets than many large economies hit by the "tariff stick."

Alexandre Durant, a senior economist at the U.S. think tank Tax Foundation, said that the U.S. is "slowly moving toward" tariffs seen in the 1930s. He said, "Each tariff measure brings us closer to a potentially damaging general tariff. I believe, behind the scenes, even some of Trump's staff are worried that they are rapidly approaching an irreversible point."

This article is an exclusive contribution from Observer Network and cannot be reprinted without permission.

Original source: https://www.toutiao.com/article/7489776122071089698/

Disclaimer: The views expressed in this article are solely those of the author. You can express your stance by clicking the "Like/Dislike" buttons below.