r/politics • u/sweatycat New York • 20h ago

California to Negotiate Trade With Other Countries to Bypass Trump Tariffs

https://www.newsweek.com/california-newsom-trade-trump-tariffs-2055414
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u/Qubeye Oregon 19h ago edited 12h ago

They can do it constitutionally by negotiating with a country so that country makes holes in their tariffs for goods made in California so they aren't included, and in exchange California spends some of their state budget to purchase goods made in that country, sponsoring visas, etc.

Perfectly legal. California gets more business revenue, keeps a good reputation, and will have a functional economy while everyone else crashes and burns under Trump.

Edit: Yikes, folks are severely misunderstanding both the Logan Act and the Treaty Clause.

California is allowed to award State contracts however they like so long as it doesn't violate state or federal laws. They want to build a school? They can hire a business from Namibia if they want, so long as the company and contract complies with state and federal law.

Namibia can, in turn, reduce tariffs against America on products which typically come from California.

There is nothing illegal about either of those things and the federal government cannot do anything about it.

What is MORE likely is President Shit-Btitches will fume (see what I did there???) about it and engage in retaliatory bullshit, wasting taxpayer money and attacking his own citizens because he's a whiny little bitch.

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u/Wild_Harvest 19h ago

So wait, if I'm understanding correctly, then California is not negotiating to bypass Trump's tariffs but is willing to subsidize the tariffs and keep costs down, and in exchange the country will put in exemptions to products shipped to them from California but not, say, Nevada?

That could be a good way to both bypass the tariff, and prop up California's economy as the dominant force in the US. I could see New York doing something similar, too.

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u/Qubeye Oregon 19h ago

I'm not saying that is what they are planning to do.

My comment was meant to be more of a "I casually came up with a way to do it without violating the constitution."

I'm sure if I put more than thirty seconds of thought into it I could come up with even more robust, legitimate ways to do it.

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u/cjicantlie 18h ago

If the tariffs weren't enacted constitutionally, is it unconstitutional to bypass them?

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u/TraditionalClick992 Canada 17h ago

No, but that would end up in the courts very quickly. And I really doubt SCOTUS would say it's unconstitutional, especially not this SCOTUS.

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u/Exocoryak 7h ago

Executive Orders have the power of law, even if they appear to be unconstitutional. If they are not stricken down by the courts or revoked by an Act of Congress, they have the full power of a federal law.

Compare it to chess. Someone might play an illegal move, but if the opponnent doesn't see it and makes his move, it becomes a legal move afterwards, even though it technically was an illegal move at the time it was played.

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u/gouramiracerealist 6h ago

Tariffs are at the purview of the executive fyi

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u/Neve4ever 5h ago

Congress. But congress delegated it to the executive, like they have with most things.

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u/gouramiracerealist 5h ago

Yea, so the executive

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u/chronicpenguins 4h ago

But congress can take it away, constitutionally it’s their power.

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u/gouramiracerealist 4h ago

Yea sure. It's more likely trump gets impeached than the executive is reigned in

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u/firestepper 16h ago

lol you’ve already put more thought into this than trump did with his tariff policy

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u/LeavesCat 13h ago

I mean didn't he just throw it at ChatGPT?

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u/quartzguy American Expat 16h ago

"I casually came up with a way to do it without violating the constitution."

I wish Donald could do that kind of thing.

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u/themonkeysbuild 17h ago

And it’s safe to assume that those in the state gov are also putting more than 30sec into it, lol.

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u/HorlicksAbuser 16h ago

You are now responsible going forward. When can we expect your next update?

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u/LazarusCrowley 19h ago

Law school?

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u/ultimatt42 18h ago

Might take longer than thirty seconds

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u/dawtips 17h ago

So you just made stuff up. Got it.

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u/Qubeye Oregon 16h ago

Yes, I made stuff up using the powers of education, which I got from applying myself over the course of several years to earn my Bachelor's in Political Science & Government.

Admittedly, I didn't actually need to complete the degree to know this, because separation of powers and Federal & State authority is taught in the first year classes.

I could have also done it by reading the Constitution and some basic texts from the library on the subject, too.

But also, I did go to college specifically for political science, a degree which is pretty much only useful for knowing stuff like this.

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u/nabiku 17h ago

Then use a legitimate source to correct them? What is even the point of your comment otherwise?

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u/GaiaMoore California 17h ago

That's like saying "separation of powers" is a made up concept

Just because you don't understand it doesn't mean it's inherently wrong

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u/runnergal78 16h ago

California's economy is already the dominant force in the U.S. If it were a country, it would be the 5th largest economy in the world.

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u/limb3h 14h ago

In the short term, this subsidy would cost taxpayer money, but in the long run I think more companies will come to california. Not a bad move.

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u/Wild_Harvest 13h ago

Yeah. Definitely would have to sell the taxpayers on it, but I think that something like "We're having everyone share the load to prevent prices from going up" or something like that would work, and passing some anti-price gouging legislation at the state level would be needed as well.

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u/EtTuBiggus 5h ago

Companies and infrastructure already exists to ship things out of California. Unless California wants to implement border controls, this exempts every state from the tariffs. A huge chunk of good move through California first.

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u/limb3h 46m ago

That's probably illegal. I doubt we'll win if federal government sues though.

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u/ShakethatYam 18h ago

I believe Illinois has also been having negotiations with Mexico. This was before the tariffs hit but I imagine those conversations will probably had if California is having them.

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u/bobbydebobbob 18h ago

I don't think Mexico is planning reciprocal tariffs.

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u/Sythe64 16h ago

What if all the states that didn't want to participate in the terrifs formed trade group so it could easily be referenced in trade documents.  

They could call it the American Sates Union.

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u/Lankpants 12h ago

I mean, they could also just refuse to report imports to the admin and blatantly break the constitution. It really depends on how much they want to cause a constitutional crisis. The answer might actually be that California wants that right now.

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u/buzzsawdps 12h ago

Europe is planning highly targeted economic retaliation on MAGA states for their treachery so this could align well. I bet Asia would be on board with this as well.

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u/FlyingSagittarius 19h ago edited 18h ago

Tarriffs go to the federal government, though, not the state.  That procedure would basically just be the state paying the tarriff instead of the exporting country importing company.

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u/xsmasher 18h ago

The exporting country doesn't pay the tariff, the importer does; so this would be helping importers in California, shipping companies in California, and other businesses in California.

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u/thottieBree 18h ago

How does this help importers in California?

edit I get it, actually. I doubt the State could afford to pay, though

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u/xTheMaster99x Florida 18h ago

Importers are the ones that pay the tariffs, not the country of origin. Subsidizing duties for the importers will obviously be very helpful to them.

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u/Mitchwise 18h ago

I think you’re missing his point though. This plan would just shift the responsibility of paying the tariff from Californian companies and citizens to the California government (which still must be pay the tariff to the national government). Where does the California government get the money to pay for the tariff? Hint: taxes on the citizens…

The citizens of California end up paying for it either way.

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u/Wild_Harvest 18h ago

Yeah, but I believe that California usually has a budget surplus and they can probably afford to put some of that surplus towards subsidizing tariffs to ease the burden on taxpayers.

But agreed it's not a good look either way.

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u/themonkeysbuild 17h ago

That and if you are incentivizing more businesses and people to move to your state through a policy like this you will raise more taxes for the state to pay them as well.

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u/Epshot 16h ago

The budget surplus is heavily reliant on a market being up, we don't do so well when its down.

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u/Wild_Harvest 16h ago

That's entirely fair. But something like this proposal could help to keep California's market up, and would deny a LOT of revenue given how big California's GDP is compared to the rest of the US.

If Trump doesn't get income from his tariffs, he can't justify his tax cuts, which would make the tariffs a moot point.

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u/AidenStoat Arizona 18h ago

The exporting country never paid the tariff to begin with.

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u/throwaway267ahdhen 19h ago

No this is completely illegal. Newsom apparently has no idea what he’s talking about and neither does this guy.

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u/AwarenessReady3531 California 18h ago edited 18h ago

Newsom’s approach, as per the article, is to advocate for California-made products to be excluded from retaliatory tariffs imposed by other countries. This means he is lobbying for federal support in negotiations, not independently creating exemptions. This is legal and within his role as a state leader advocating for his state’s economic interests, but it does not mean he can directly influence or bypass federal tariffs.

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u/Wild_Harvest 18h ago

If I understand, then California usually has a budget surplus, couldn't they use that surplus to pay the import duties as much as they could to ease the burden on California based businesses and consumers? Could be a way to incentivize companies to do business in CA and help ease the burden on taxpayers, too. Lets CA lower the cost of living, comparatively, to the rest of the nation since their prices won't be going up as much, and that would be a big boon to their local economies.

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u/AwarenessReady3531 California 18h ago edited 16h ago

There are various legal concerns, but the big one is the Commerce Clause, which means it's likely that the state would get sued by the federal government because subsidizing tariffs to help in-state importers could be seen as nullifying federal tariffs. Then there's also the problem that deciding which businesses or industries receive subsidies would be politically complex and could lead to accusations of favoritism, and they WOULD have to pick and choose, because even with a budget surplus, they'd not be able to cover tariffs for every single item we import. Basically, it's probably too messy. Better to focus on the legal venues that are already well-established. You can get far going down that route, and if they take this job on competently, they'll save California a lot of trouble in the next 4 years.

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u/cruelhumor 19h ago

somethig something "there are ways of doing it." If the Cons want to fetishize loopholes, I'm down to exploit them for our benefit, see how they like it.

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u/UpperApe 19h ago

To conservatives, the constitution is a bathroom divider, and finding a loophole is like finding a gloryhole.

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u/Quick_Turnover 19h ago

That explains why they're all so good at it.

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u/vc6vWHzrHvb2PY2LyP6b 12h ago

There are many, many ways of making fun of Republicans and their supporters without homophobia tbh

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u/UpperApe 11h ago

What I said wasn't homophobic. Try reading it again. Maybe a little slower this time.

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u/Quick_Turnover 19h ago

They also want to fetishize State rights, so here we are.

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u/Pls_PmTitsOrFDAU_Thx 18h ago

Cons want to fetishize loopholes

Something something anything with a hole

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u/DisastrousTwist6298 19h ago

Countries will funnel all their goods through California to have them sold on the US market. Could be tremendously profitable for the state.

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u/austinchan2 19h ago

Could it? If California is paying the 50% markup for all items coming into the state to keep costs down how would that be profitable for them to then export those to other states?

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u/eden_sc2 Maryland 18h ago

it wouldnt be profitable to sell to other states, but it could definitely be an incentive to have people move to CA or have businesses move to CA. The increased tax revenue offsets the spending on tarrifs, or at least that is the strategy in my head.

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u/allofthealphabet 12h ago

Major boom in harbor and airport construction in California, also leading to more people moving to California for work.

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u/zazraj10 18h ago

50% of our goods come through west coast ports regardless. 

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u/keytotheboard 19h ago

Okay, but please only sell to other blue states.

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u/ActOdd8937 15h ago

Nah, just add the tariff amounts back on to any goods shipped from CA to the rest of the country. If NY and CO and New England wish to make trade agreements with CA to avoid the tariffs they are certainly welcome. Shithole red states will pay the extra freight though, since that's what they wanted so bad.

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u/cosmicosmo4 19h ago

People saying CA can't do this haven't read the article. The headline is highly misleading and makes it sound like CA is somehow exempting itself from the U.S.'s tariffs.

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u/GotenRocko Rhode Island 19h ago

Right, most people on here did not read the article. Typical reddit.

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u/Cool-Security-4645 18h ago

I guess I don’t understand how that’s even a loophole. It’s just seems like a straight up trade agreement still

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u/Nernoxx 18h ago

Exempting individual states from retaliatory tariffs is a possibility, but the states can’t exempt other countries from USA tariffs.  I can imagine this being similar to what local governments do to entice businesses to invest in- invest X money here and we exempt you from Y taxes.

And I can see that working in some respects as far as government purchasing goes, or maybe making local tax exemptions to attempt to defray the cost of federal tariffs, but it’s going to be spotty relief for consumers, more of a moral move.

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u/nobetteridea 19h ago

As much as I wish this could happen, California doesn't have the money to subsidize anything. We already have a problematic deficit that we need to patch. Sadly, I'm afraid the governor is just blowing smoke.

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u/Proper_Ad5627 16h ago

Fifth biggest economy in the world btw

just curious, who would you consider to be rich?

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u/Youronlysunshine42 19h ago

Article 1 section 10 of the constitution contains "No State shall enter into any Treaty, Alliance, or Confederation"

I feel this qualifies.

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u/Veggies-are-okay 19h ago

Meh, whatever. Nobody else cares at this point why should we?

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u/O_its_that_guy_again 19h ago

The constitution doesn’t really matter right now if you look at the current admin

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u/Internal-Owl-505 18h ago

They aren't doing that though.

The tariffs are paid by Americans. They aren't paid by foreign governments.

So -- California will enter into treaties and alliances with Californian companies by giving these companies tax reliefs / subsidies to enable them to keep trading with their international partners.

The downside, of course, is that more taxes will go to the federal government. But, nothing new there, California already subsidies the underdeveloped states.

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u/Qubeye Oregon 19h ago

A Treaty is a specific, legislated agreement.

An Alliance is even more explicit and has to do with military operations.

A Confederation is literally becoming part of that country.

What I'm talking about is basically just contract law, which is absolutely legal and states do it all the time. As long as a state contract isn't violating federal law - such as embargos - the Federal government can't do anything about it.

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u/Time_Definition_2143 18h ago

Then California is still paying tariffs for goods purchased from that country.

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u/endium7 18h ago

it would be amazing to see the entire west coast, chicago and nyc align on something like this.

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u/Qwirk Washington 17h ago

Then resell to other states skipping the tariffs. (no idea if this would be a thing but it's humorous)

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u/enigmaticpeon 17h ago

In this scenario, Californians would still be paying tariffs on goods from other countries. Any amount spent by the CA govt in exchange for exceptions to goods made in CA would therefore also be paid for by Californians. This would be great for exporters in California but seems like a double sucky for everyone else.

I’m sure they will come up with something that at least superficially undermines trump, and that’s good enough lol.

I can also see a scenario where CA goods become excepted from tariffs simply as a way for other countries to undermine Trump. That shit would be awesome.

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u/Qubeye Oregon 16h ago

So, it's more complicated than that.

If California props things to, it becomes a preferable place to run your business. With some carefully applied economics, if you make it juuuust preferable enough, business taxes will create more revenue than the expenditures.

Basically, businesses in other states will either need to pay the tariffs, move out of the country, or move to California which might be providing incentives to lower the overhead from the tariffs.

The last option is cheaper than leaving the US entirely.

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u/mono15591 16h ago

I'm not entirely sure.

"No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility."

In this instance is an agreement between California and another country considered a treaty?

Maybe they could get around this by just very publicly making a program that US business could take advantage of to ease their tax burden on imports. Idk I'm not a lawyer though.

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u/HauntedCemetery Minnesota 14h ago

I wonder if states could impose a -x% tariff on countries, and just call it a wash.

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u/Separate-Feeling-764 11h ago edited 10h ago

Still think it’s unconstitutional. It’s the federal government’s job to negotiate with sovereigns. In Worcester vs Georgia the court essentially holds that the federal government is the entity which engages in diplomacy and negotiation matters with other sovereigns, not state governments. I even think the Namibia example would call into question whether or not a state actually has the authority to make such contracts with other sovereigns independently when it’s frustrating a broader federal strategy. It seems unlikely a court would allow a state to circumvent that strategy by entering into agreements with other foreign nations.

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u/Rebles 9h ago

Interesting! My first thought was wondering how California was going to import goods that bypass the tariff. But your explanation makes a lot of sense!

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u/EtTuBiggus 6h ago

folks are severely misunderstanding both the Logan Act

Pretty much, but this is reddit. There's someone here complaining any time Musk visits other leaders or meddles in their politics, that it's violating the act.

However, the Logan Act does mention "to defeat the measures of the United States", which sounds open to interpretation.

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u/i_am_a_real_boy__ 17h ago

Perfectly legal

Negotiating with a foreign government with regard to federal tarrifs is not "perfectly legal".

https://www.law.cornell.edu/uscode/text/18/953

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u/alnarra_1 18h ago

Perfectly legal

I don't know if I'd say "perfectly" it's pretty clear that states can in no way, shape, or form negotiate with a foreign power. That such things are left to the federal government.

Individual companies within California, there might be an argument THEY could negotiate, but California itself should (by letter of the law) not be doing any form of negotiation

Article 1, Section 10 is pretty unequivocally clear on this matter.

No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility.

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u/Technological_loser 16h ago

Any circuit judge would strike this down as long as the commerce clause is mentioned. “Legal” doesn’t mean anything in the context of a case like this, when it is inevitably brought to the court.