Californian Governor Gavin Newsom said on Friday that California could consider suspending the hundreds of billions of dollars in taxes paid annually to the federal government, in response to reports that U.S. President Donald Trump threatened to cut funding.

Earlier media reports said that Trump was considering "completely terminating" federal grants to the University of California system.

In a post on social platform X on Friday, Newsom wrote: "It is Californians who are paying for the federal government. We pay more in taxes than we receive in returns by over $80 billion."

He cited a recent analysis by the Rockefeller Institute showing that California's tax payments exceeded federal grants by about $83 billion in 2022.

"Perhaps it's time to cut this funding," Newsom added.

White House spokesperson Kush Desai denied that the administration was planning to comprehensively cut funding in response to Newsom's remarks but harshly criticized California's policies, calling them "anti-energy, permissive on crime, supportive of child gender transition and illegal immigrant sanctuary policies."

Trump has previously used federal funds as political leverage to pressure California multiple times. Just last month, Trump threatened to cut off financial support to the state if a transgender athlete participated in California's women's athletics competitions.

California ranks first in GDP among U.S. states. According to data from the International Monetary Fund (IMF) and the Bureau of Economic Analysis (BEA), Japan's GDP in 2024 will be $4.02 trillion, while California's GDP in 2024 will be $4.1 trillion, meaning that California's economic output now ranks globally just behind the United States, China, and Germany.

California Assembly Speaker Robert Rivas also proposed a similar suggestion earlier on Friday through social platform Bluesky, stating that suspending federal tax payments was an option. Rivas condemned Trump's possible cancellation of federal grants as "unconstitutional and retaliatory."

"We are the engine of the national economy and the largest tax-paying state, and we deserve reasonable returns," Rivas wrote. "I will use all legitimate and constitutionally granted means to defend California—including considering options such as suspending federal tax payments."

California State Senate President Pro Tempore Mike McGuire also vowed on platform X to protect California from "the president's illegal and unprecedented attacks on our state," but did not mention suspending tax payments.

In fact, California has a history of attempting to prevent federal taxes from flowing to the Trump administration. In 2017, then-state Senate President Kevin de Leon had proposed a state tax credit mechanism to allow Californians to avoid federal tax increases targeted at their state.

It is worth noting that in this week's Democratic mayoral primary debate in New York City, former state assemblyman Michael Blake and current state senator Jessica Ramos also proposed a similar suggestion, stating that New York City should consider suspending federal tax payments.

(Caixin Summer Junxiong)

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