The trouble with Newsom’s ploy to spare California in trade war – The Mercury News

Governor Gavin Newsom has the appropriate political instincts, since it seeks to isolate California from the possible economic catastrophe of a fiscal war against global trade, Seijs to avoid the state of retaliation rates. Unfortunately, he only won the job.

Unfortunately for California, this is a time when Newsom would have to be the president to make the change. As great that we are, California is not an island when it comes to commerce. Our estimation ports of 40% of all the containers that reach this nation from another place. And nobody really tracks where it ends.

“The governor’s proposals are unfeasible,” said Jock O’Connell, an international commercial advisor based in Sacramento for Beacon Economics. “They simply cannot be implemented.”

It may sound warm and confusing for the staquimos focused on California that we are somehow special when it comes to trade. Newsom’s comments definitely embody that superiority complex that can sometimes shine in the golden state.

“Donald Trump’s tariffs do not represent all Americans,” said Newsom last week. “We value international trade. We value our manufacturing: the largest manufacturing base in the United States of America. We hope to continue strengthening those ties, strengthen those ties.”

However, we must expect to pay higher rates along with Arizona and Texas. Because? To amend a family saying, what happens in the port of Los Angeles does not stay in Los Angeles.

Behind all these products that move through the ports and airports of California there are limited statistics, said O’Connell, the rare economist with a sense of humor. When a product leaves California elsewhere, an employee fills a form that is not really done did not do well. It is only specified precisely where the product left the state.

And not the ranch on the precision of these forms of export. “The person who fills the form is usually one of the least superior people in the organization,” said O’Connell. “They have better things to do to ensure that the forms are precise.” Analyzing these forms can detect trends in trade, but that’s all.

There is only a handful of Good’s that leaves the ports of California that a shipping entity can assume that it comes from here: “Almonds, pistachios and nuts,” said O’Connell. But it is naive to think that a foreign country would give these California products a break despite the best lobbying of Newsom. These are products in which Trump’s supporters can punish with a high degree of precision by imposing retaliation rates.

These nuts “are basically cultivated in red counties in center of California,” said O’Connell. “As such, they are likely to be attacked by other countries that seek products that are sensitive politicians.” That means a much greater perspective of a higher rate on products such as thesis, no lower.

It is already happening: China, for example, has imposed a 35% tariff on California almonds. Its leaders are not obsessed with the governor’s podcasts that radiate in Marin County. “The Chinese have had an identification history of who has power in Washington, who can influence the president,” O’Connell said. “They are not looking at Gavin Newsom.”

However, Newsom has two other options that could result in California doing better with commercial partners such as China and others that are now Trump’s objectives.

“If we are an independent nation, we could establish our own rates,” O’Connell said. Then, President Newsom could begin to demand that all export facilities be documented what goods come from our nation or elsewhere.