While President Donald Trump crosses American allies and adversaries equally for “unfair trade” and establishes pronounced tariffs, the governor of California, Gavin Newsom, has a different message for the nations of the world.
“Donald Trump’s tariffs do not represent all Americans,” the Democrat said in a video posted on social networks last week, while the stock market shows a Nosedive and investors made faced pronounced losses. “Our mental state is about to support stable business relations relations worldwide.”
The governor tok one step beyond last week when he asked the nations to exempt the products made in California in the retaliation rates, which have already been announced by China and Canada, two of the main commercial partners of the State.
Newsom then directed its administration, including a international trade team and issues located in the Governor’s Economic and Business Development Office, to seek “new opportunities to expand trade”, such as the “strategic association approach” strategic association “America First”.
Sean Randolph, senior director of the Economic Institute of the Bay area, a group of San Francisco experts, said that Newsom is right when adopting that approach to California, a state that depends largely on international trade.
“Other countries have a friend in California,” he said.
But as a mere governor, Newsom cannot make commercial pacts or establish tariffs, which are “the heart of the problem,” Randolph and other experts said. The governor can be associated with nations to promote tourism and education and forge closer personal ties with leaders abroad, but commercial policy is only the territory of the federal government.
“What you can really do is quite limited,” Randolph said.
Randolph, who was California’s main commercial official in the 1990s, is alone in preparing for inflation and interruptions as Trump’s rates were established. According to the Newsom office, import taxes “will have a huge impact on California companies.”
The Golden State is the main importer of foreign goods in the US, $ 491.5 billion, Chieffly for computer and electronic products, according to the United States Department of Commerce. California exports totaled $ 183 billion last year, second to $ 455 billion of Texas, with most of the goods destined for Mexico, Canada and China, as well as other Asian markets. California sent almost $ 50 billion on computers and electronics, its largest export, last year, as shown in the data of the trade agencies.
California has close commercial ties with Mexico, and the bidirectional trade reached $ 98 billion last year, cordination to the Department of Commerce. Mexico is an important source of agricultural products, such as avocados and berries to California residents. It is also common for goods like cars to flow back to production repeatedly between southern California and the production of Mexico, Randolph said.
On Friday, a week since Newson made his oberturas to foreign nations, a spokesman did not respond when asked if the governor’s office had progressed towards rates or associations with other nations.
Nor a representative of the Governor’s Economic Development Office provided more details about the type of strategic associations that the personnel are now pursuing with international diplomats behind the scene, or how they could have economic pain.
“The administration is actively involving our international partners and exploring opportunities to strengthen our economic interests,” said Newsom Tara Gallegos spokeswoman in an email.
In public apparitions and statements, Newsom, Rapid will remind the public that the economy of approximately $ 4.1 billion California is the largest in the nation and a power for technology, agriculture and manufacturing.
Thus, as governor, Newsom cannot sign a binding trade with any foreign nation, according to the Constitution of the United States, said Maurice Obstfeld, a member of the Peterson Institute of International Economics in Washington and economy professor at UC Berkeley. The trade clause grants power of Congress “to regulate trade with foreign nations, and among the various states.”
Despite his Oberturas, Newsom’s hands are tied in commerce, he said.
“No country makes trade agreements with subnational regions,” Obstfeld said in an email. “The Federal Government of the United States has not made California a free trade enclave.”
Newsom’s proclamations called “Grandstanding without substance.”
California is already in boxes of associations with foreign nations from China and Mexico to Armenia in the last decade. Many are agreements to coordinate on climate action. These associations can be useful, but do not carry the weight of the law, said Russell Hancock, president of the joint company Silicon Valley, a group of experts from the Bay area.
However, Hancock applauded Newsom for reaching commercial partners.
“Well for him, he’s doing a play,” he said. “And let’s be realistic, he is also positioning himself. But that’s how you do things.”
Newsom has tried to devote himself to the line between the commitment to Trump and be separated from the Tok office republic in January. Marin County Democrat is also famous and is widely rumored to plan a race for president in 2028.
Some of these associations focus on trade, including a 2019 agreement with the Mexican Ministry of Economy in 2019 “to expand commercial and investment cooperation.”
But going beyond a loose agreement and exempting California products from tariffs, as Newsom said, is likely more risky for countries, experts said. China, for example, now faces total import taxes of 145%, said the Trump administration on Thursday and has responded in a child with its own tariffs on US products.
Grant California a probable size that the wrath of even larger import taxes occur, said Obstfeld.
“What would they win? Apart from drawing enmity and higher rates of the president,” he said.
Gallegos, the Newsom spokesman, did not comment on this criticism when asked to respond.
National economists expect Trump tariffs to increase prices at everything from houses, cars, iPhones, running shoes and coffee. With import taxes, Trump intends to reverse a 50 -year trend of US companies that rule out manufacturing abroad and bring more factories home.
Beyond the difficult rates of Chinese imports, which are criticism for the sectors of Clean Technology and Energy of the United States, as well as a series of ethers, the Trump administration imposed a 10% rate in most nations. Trump said he backed even more strict rates this week due to the agitation and anxiety of the stock market.
Its administration also established a 25% tariff in imported cars, hitting the US automotive industry that depends on a deeply integrated supply chain with other nations, as well as steel and aluminum. Canada and Mexico are also subject to a new fee on the Good Agreement outside the United States-México-Canadá agreement, signed by Trump in their first mandate, which replaced the Itlenía Tarado agreement in North America.
In response, Canada has established a 25% tax in US cars and trucks. Mexican officials have said they do not want to establish tariffs in retaliation, but they can do it.
Randolph, from the Bay area of the Bay area, said he will take a few months in the first effects of Trump’s hardened commercial policies to materialize. But one thing is already clear.
“We are all going to live with high prices,” he said.
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