Business
Trump tees up tariff hikes on top trading partners. What's at stake for California?
WASHINGTON — When President-elect Donald Trump announced he would impose sweeping tariffs on key trading partners on his first day in office, he signaled a return to a favorite strategy: a reverse carrot-and-stick that applies the stick of dire consequences in order to force countries to give him what he wants. In this case, that means a tougher crackdown on illegal migration and the movement of drugs into the U.S.
The risk of applying this tactic to foreign trade is that the whole U.S. economy is so reliant on the status quo that any miscalculation could have damaging consequences, especially in California and other trade-dependent states.
To some extent, that happened in Trump’s first term, when selective tariff increases set off costly trade wars with China and others.
The fallout from tariffs could have major damaging effects on California’s globally integrated economy, affecting thousands of businesses and many more jobs, consumer prices and choices of goods. And, if trading partners retaliate, tariff increases could hurt the state’s sales of farm goods, electronics, transportation equipment and other leading exports. Mexico and Canada are the top two destinations for California exports, and China and Mexico account for the bulk of the state’s imports.
Even uncertainty over such possibilities can cause havoc in financial markets and raise fears of higher prices, as well as disruptions to vital businesses dependent particularly on Mexico and the Pacific Rim.
Trump posted on his Truth Social site late Monday that on his first day on the job he would impose 25% tariffs on all goods from Canada and Mexico, and also tack on an additional 10% levy on Chinese imports. He said these countries — which are the United States’ top three trading partners — would be paying the price for not doing enough on illegal migration and drugs flowing into the U.S.
“This Tariff will remain in effect until such time as Drugs, in particular Fentanyl, and all Illegal Aliens stop this Invasion of our Country!” Trump wrote.
The reality is that illegal border crossings from Mexico have fallen dramatically in recent months as the Biden administration has tightened up especially on asylum arrivals.
And U.S. drug seizures along the Southwest border have changed little in recent years, according to Department of Homeland Security statistics.
For years, China has been a major producer of fentanyl coming into the U.S., and Trump said in his post that Beijing has failed to clamp down on drug suppliers as it had promised.
Canada is not a big source of illicit drugs or illegal migration into the U.S., although there has been a sharp increase in unauthorized crossings along the northern border in the last year, driven in large part by Indians. Trump didn’t explain why Canada was targeted, but some analysts said he may be viewing the drug and migration situation as a North American problem.
U.S. stock markets, which had been on a run in recent days, opened mixed Tuesday but ended the day higher, suggesting that investors are familiar with Trump’s playbook and that these three countries could avoid the tariffs if they present a credible plan to curb the drug supplies and secure the borders, said analysts at Capital Economics. Mexico staved off a similar Trump threat over illegal migration in 2019.
But Trump’s salvo just three weeks after the election, plus his frequent campaign promises of hiking tariffs, suggests that he will move more quickly in carrying out his trade agenda than in his first term.
Trump has said he would slap tariffs of 10% to 20% on goods from around the world, and up to 60% on imports from China.
The consequences could be dire for California’s economy, given its heavy trade with China and Mexico.
Imports from China ($120 billion) and Mexico ($62 billion) accounted for a full 40% of the $450 billion worth of foreign products that entered California last year. And Mexico, Canada and China rank as the state’s top three export markets.
Overall, international trade and investment and related commerce employ hundreds of thousands of Californians and are a major economic engine for the state.
At the Port of Los Angeles, China’s share of all cargo, as measured by containers, has fallen to 43% from 57% in 2022. But the Port of L.A., the busiest in the nation, has kept growing in overall volume due to increased shipments from other Pacific Rim countries.
With U.S.-China relations worsening over the last decade, many manufacturers in California, as elsewhere, shifted at least some production and suppliers away from China to other sites in Asia and also to Mexico. But the scale of tariffs that Trump is announcing, whether 10% across the globe or separate duties on Chinese, Mexican and Canadian goods, would be too great for other countries to make up.
Much of U.S. imports from China and Mexico are consumer goods and intermediate parts that go into autos, appliances and other products. Southern California apparel companies have for years been sending clothes to be sewn and finished in Mexico, duty-free. Vehicle components often cross North American borders back and forth several times before final assembly — and tariffs added along the way will mean higher prices for everybody.
Now those long-established supply chains may be in jeopardy as analysts expect Trump to try to remake trade deals with North American partners, among others, using tariffs and the big American economic market as leverage.
“It’s going to be a jolt to the system, and at the end of the day it will be impactful to consumer pocketbooks,” said Rachel Michelin, president of the California Retailers Assn. She said her member companies have been trying to get ahead of higher tariffs by ordering products before Trump takes office.
“From a California perspective, it’s going to be alarming because the cost of living here is higher,” Michelin said. “We really are pricing people out of living in California.”
In Trump’s first term, China and other countries hit back by raising tariffs on sensitive American farm goods, including soybeans and wine. But overall trade also slowed, with U.S. companies scurrying to file for tariff exemptions and trying to curry favor with his administration for relief.
Jock O’Connell, a California trade specialist at Beacon Economics, said the Trump administration’s trade skirmishes with China in 2017 caused a dramatic falloff in the state’s trade volume. California exporters learned to diversify their markets. This time around, he said, the state may have even fewer options.
“There’s not going to be a lot of political payoff” in helping California, O’Connell said. “Can you imagine [Gov.] Newsom flying to Washington to meet with trade officials in the White House to deal with tariffs?”
Greg Danenhauer, co-owner of Parker Boiler, a manufacturer in City of Commerce, said he still buys some steel and cast iron burners from China, but overall looks to China for less than 18% of his supplies, compared with as much as 25% in 2016. Parker Boiler also buys temperature controls and other products from Mexico.
Danenhauer said Trump’s earlier tariffs on Chinese products actually helped level the playing field for domestic makers such as himself. And he’s not worrying about higher tariffs down the road.
“To me, everybody is panicked about it,” he said. “But we don’t know yet” what’s coming, he said.
Dan Ujczo, a trade lawyer at the Ohio-based firm Thompson Hine, drew a distinction between Monday’s tariff announcement, which he said was “very tactical and transactional, targeted for a specific purpose,” and Trump’s plans on universal tariffs and those aimed at China. The latter “are more transformative or transitional when it comes to global trade,” he said, adding that they are likely to be proposed later and closer to when tax cuts and other fiscal plans are ready.
During his first term, Trump often used threats such as high tariffs to browbeat America’s allies into concessions. On defense policy, for instance, he famously raised doubts about continued U.S. participation in the North Atlantic Treaty Organization; European allies responded by boosting their contributions to the cost of mutual defense.
Chinese imports are already subject to U.S. tariffs of 10% to 25% stemming from Trump’s actions in his first term and which were left in place by President Biden. That helped Mexico overtake China in 2021 as the United States’ top two-way trading partner. Still, the United States’ biggest trade deficit, by far, remains with China, in excess of $279 billion last year, according to the Census Bureau.
Trump’s tariffs announced Monday, if implemented, would almost certainly cause significant disruptions for industries and raise consumer costs for gas, autos and all sorts of other products, possibly reigniting inflation, which appeared to be a key factor in his election victory.
The U.S. imported a total of about $1.3 trillion worth of goods from those three countries last year, and about two-thirds of that amount came in tariff-free, thanks to the U.S. free trade agreement with Mexico and Canada.
Despite that trade pact, experts said Trump could impose the tariffs by using the statutory authority under the International Emergency Economic Powers Act of 1977, which he cited extensively in his first term, including in his dealings with Mexico and China.
Whether tactical or not, the tariff threats could escalate — Mexico already said it could retaliate with counter-tariffs. And some economists warned that Trump’s plans could backfire.
“It’s a reckless grenade toss,” said Michael Clemens, an economics professor at George Mason University who specializes in international migration. “Harming American consumers and workers with a trade war will do nothing at all to address their concerns about immigration and drugs.”
Residents of Monterey Park voted overwhelmingly to ban data centers on election day, making the San Gabriel Valley city the first in the nation to do so by public vote.
As of Wednesday, 86% of votes were in favor of Measure NDC, the city ban, according to the Los Angeles County registrar-recorder/county clerk.
Other cities and towns have passed moratoriums on data centers, as a wave of opposition sweeps the country. But the Monterey Park vote can only be overturned by another ballot measure, making it the most permanent data center ban in a jurisdiction.
Monterey Park’s City Council had already banned data centers by ordinance, after a proposed 247,000-square-foot data center met an outpouring of public anger and concern. The developer withdrew that plan.
That facility would have been less than 500 feet away from the nearest home, and would have used three times the electricity of the entire 60,000-person city. Residents said it would have caused noise and air pollution and driven up electricity rates.
“This ensures long-lasting protections for current and future generations,” Amy Wong, co-founder of the group San Gabriel Valley Progressive Action, said of the vote. “It means that future city councils cannot overturn a data center ban, even if data center developers wanted to spend money to fund pro-data center candidates.”
The measure had no formal opposition. The developer of the proposed facility, investment firm HMC StratCap, said it wouldn’t engage in the ballot fight when it withdrew in March.
The Data Center Coalition, an industry trade group, expressed disappointment in the vote.
“It sends a signal that the area is closed for business, both for data centers and for other significant economic development projects,” state policy director Khara Boender said.
“It deprives local residents of the opportunity to compete for jobs and investment, while also causing the area to relinquish substantial long-term economic investment, high-wage jobs, and critical tax revenue to neighboring areas or other states.”
SGV Progressive Action worked with hyperlocal groups including No Data Center Monterey Park to rally support for the measure.
The group is now focused on stopping data center proposals in the City of Industry and fighting a move by City of Industry, Santa Fe Springs, Vernon and City of Commerce to welcome data centers and other industry with fast-tracked permitting and tax incentives.
City of Industry, in the San Gabriel Valley, and Vernon, south of downtown L.A., are primarily industrial areas, each with around 300 permanent residents. They are employment centers, and tens of thousands of workers commute in daily.
There has been little vocal opposition to data centers among the few residents of these cities. Wong said the protest is primarily coming from the surrounding neighborhoods.
“If a data center gets built in City of Industry, residents across the region would bear the brunt of pollution and increased utility costs,” Wong said, noting that it is surrounded by 16 other cities and unincorporated communities.
Data center proposals have been limited in California compared to Virginia, Texas, Georgia, Illinois and Arizona, which sit at the center of a recent boom in hyperscaler facilities to power artificial intelligence.
California has the third-most data centers in the country, with 300, but high electricity rates, expensive land and regulatory hurdles mean that fewer, and smaller, facilities are currently planned than in other hotspots.
That doesn’t mean opposition hasn’t been fierce. In Coachella and Imperial County, residents are showing up in droves to protest local proposals.
In the San Gabriel Valley, Montebello, El Monte and Baldwin Park have all enacted temporary moratoriums, and Alhambra recently banned data centers as part of a zoning code update.
Wong said she hoped the ballot measure vote would galvanize the opposition. “The vote is a testament to the people power of our region,” she said. “Our region is worth protecting, and we won’t let data centers determine our future.”
A rule intended to prevent rent gouging in the wake of the Eaton and Palisades fires has lapsed in Los Angeles County, possibly exposing some renters to hikes.
The executive order that blocked rent increases was issued by Gov. Gavin Newsom amid the devastating wildfires last year. Under the order, landlords couldn’t increase rents by more than 10% above their prefire levels.
The rule, which was supposed to be temporary and was repeatedly extended, ended Friday after a vote to extend it again failed to garner enough votes. Supervisor Lindsey Horvath, whose district includes Pacific Palisades, sounded the alarm in a motion to extend price protections that failed to pass at the Board of Supervisors’ May 19 meeting.
“These price gouging protections continue to be necessary as construction and rebuilding continue, and as thousands of people remain displaced,” the motion said. “Families which signed short-term leases could face drastic price increases of 50% or more without further price gouging protection.”
Los Angeles County is home to more than 1 million rental properties, though not all of them needed protection from the new rule. There are already stricter rent increase caps for many residences, depending on the location, type and age of the building. Despite the rent control in the region, the people of Los Angeles pay among the highest rents in the country.
It is uncertain whether renters will face rapidly rising rents now that the protection has lapsed. But some real estate experts and policymakers said there was no need for the temporary rule that was part of the governor’s state of emergency.
Supervisors Kathryn Barger, Janice Hahn and Holly Mitchell abstained from voting on the motion to extend the protection, while Supervisors Hilda Solis and Horvath supported it.
“I abstained because I did not see sufficient evidence to justify extending this emergency ordinance, nor did I see evidence to eliminate it entirely,” Hahn said.
Barger’s office said she supported allowing the protections to sunset while waiting to see whether new information emerged.
“Market data already shows countywide rents are only about 2% above pre-emergency levels and rental inventory has grown,” Barger representative Helen E. Chavez Garcia said. “The Supervisor is also mindful of the burden these ongoing protections place on small property owners throughout the county.”
Mitchell did not immediately respond to a request for comment.
There haven’t been steep rent hikes in neighborhoods within three miles of the Palisades fire, according to a Times analysis of data from Zillow, the property listing company.
In ZIP Codes within three miles of the Palisades fire, rent increased 4.8% from December 2024 to April 2025. In areas around the Eaton fire, which destroyed swaths of Altadena, rent jumped 5.2% in the same period.
In L.A. County, ZIP Codes farther from the fires saw only about a 2% increase.
A landlords representative, Jesus Rojas of the Apartment Owners Assn. of Greater Los Angeles, told the supervisors during public comment at the meeting that the county’s rent-gouging rules have “long outlived the emergency they were intended to address” and are now being “wrongfully used to harm thousands of rental housing providers throughout the county.”
“There is no proof that multifamily rental housing providers are hugely increasing rents for impacted homeowners,” Rojas said.
Indeed, there are strong signs that the property market in the Los Angeles area has at last begun to cool.
L.A. metro-area rent prices recently fell to a four-year low, with the median rent slipping to $2,167 in December.
Meanwhile, condominium sales had their slowest start of the year in decades. Condo sales in Los Angeles have plummeted to a 20-year low, with fewer than 2,000 units sold in January and February — the worst start to the year since 2005.
Newsom defended the price-gouging protections shortly after they went into effect.
“In the days following the Los Angeles firestorms, we worked quickly to protect Los Angeles survivors from any form of exploitation,” he said in February 2025. “The state has the tools in place to not only block price gouging during this emergency, but also to prosecute bad actors.”
The Los Angeles County Department of Consumer and Business Affairs said it received more than 2,000 complaints after the fires, alleging that retailers and landlords were taking advantage of people put in hardship by their losses, and sent out more than 2,000 cease-and-desist letters to businesses and landlords for alleged price gouging, said Morine Merritt, who oversees department investigations into consumer and real estate fraud.
“Close to 90% of the complaints that we received involved allegations of rent increases,” Merritt said in an interview. Now that the fire-related protections have expired, existing laws and “regular market conditions determine price increases for goods and services, including rents,” she said.
Crackdowns on fire-related rent gouging have been rare, said Chelsea Kirk of the activist organization the Rent Brigade, which analyzed L.A. County’s rental market in the year after the fires. It reported 18,360 potential examples of price gouging in listings but said that few lawsuits had been filed by authorities so far.
Last week, Rent Brigade announced what it said was the first private civil lawsuit brought by a family that claimed to be rent-gouged in the aftermath of the wildfires. Plaintiffs Randall and Candy Renick, whose Altadena home was damaged, said they were charged nearly three times the maximum permitted rate for nearly 10 months. They seek restitution of $96,000 plus civil penalties and attorneys’ fees.
The rental market has probably stabilized since the fires, Kirk said, but other families may still be “locked into illegal rents” that they agreed to pay when they were in a rush to find housing after they were displaced.
Dear Mr. Pelley:
I meant what I said in my letter last week to the 60 Minutes team: joining 60 Minutes is the honor of my career and I am grateful to be working alongside the people who have contributed to the most important television journalism brand this country has ever produced. While I’m new to 60 Minutes, I’ve devoted my career to investigative journalism and storytelling. I started this job excited to collaborate and to benefit from the wisdom and experience of the 60 Minutes veterans, with you among them. For that reason, one of the first things I did in my new role was call you to talk and invite you to dinner. It is a profound disappointment that you rejected that overture and chose ambush instead. Yesterday, you hijacked my first meeting with staff to disparage me, my qualifications, and my intentions with remarkable incivility and contempt. I welcome a diversity of viewpoints and respectful debate among the team, but this was nothing of the sort. Yesterday’s performative display of hostility enacted in front of the staff instead of in a civil, private conversation-demonstrated that you have no interest in contributing to the future success of the show, or approaching my new tenure with a mind open to collaboration and progress. I am here to deliver first-in-class news programming, not to make headlines about newsroom drama. I am eager to work alongside those who share this goal.
Despite yesterday’s misconduct, I had hoped that in sitting down with you today we could find a path forward together. You made clear that you are not interested in such a path.
Your antipathy to the future of the show has come through loud and clear. And I have heard you. I therefore write on behalf of CBS News, Inc. (“CBS”) to inform you that your employment with CBS is terminated for cause effective immediately. Enclosed is your formal termination letter.
Sincerely,
Nick Bilton
Executive Producer, 60 Minutes
-
News5 minutes agoNational Guard has done little to reduce violent crime in D.C., a new study finds
-
Los Angeles, Ca1 hour agoMan claiming to be armed robs Culver City bank, gets away with $10,000
-
Detroit, MI2 hours agoFired Detroit TV anchor Taryn Asher files sex discrimination lawsuit against old station, claims new GM protected men
-
San Francisco, CA2 hours agoSan Francisco family devastated as they face nearly 90% rent increase
-
Dallas, TX2 hours agoWings’ top pick Azzi Fudd hosts clinic as Cash App donates to Dallas nonprofit
-
Miami, FL2 hours agoPatients left scrambling for care after Miami-Dade woman accused of operating an unlicensed surgery recovery center
-
Boston, MA2 hours agoClover plans to reopen some locations after sudden closure, thanks to an anonymous investor
-
Denver, CO2 hours agoNew report finds Denver metro home buyers and sellers experiencing ‘unattainability fatigue’
