r/politics • u/sweatycat New York • 1d 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/Wild_Harvest 1d 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/FlyingSagittarius 1d ago edited 1d 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 1d 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/Mitchwise 1d 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 1d 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 1d 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 1d 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 1d 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.