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Newsom claims Trump's tariffs will reduce California revenues by $16 billion

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Newsom claims Trump's tariffs will reduce California revenues by  billion

Gov. Gavin Newsom’s Office said Tuesday that President Trump’s tariff policies will reduce revenue in California by $16 billion through next year.

Despite personal income tax and corporate tax receipts in the state coming in $6.8 billion above projections through April, the Newsom administration is predicting that overall revenue will be lower than they could have been from January 2025 through June 2026 because of the economic impact of Trump’s tariffs.

The governor released the new information, which his team dubbed the “Trump Slump,” on the eve of the presentation of his revised 2025-26 state budget plan, seeking to blame the president for California’s expected revenue shortfall. His office has not released any additional figures about the state budget.

Newsom is expected Wednesday to project a deficit for California in the year ahead with Medi-Cal costs exceeding expectations, including his signature policy to provide free healthcare coverage to low-income undocumented immigrants. The new shortfall comes in addition to $27.3 billion in financial remedies, including $16.1 billion in cuts and a $7.1-billion withdrawal from the state’s rainy day fund, that lawmakers and the governor already agreed to make in 2025-26.

The deficit marks the third year in a row that Newsom and lawmakers have been forced to reduce spending after dedicating more money to programs than the state has available to spend. Poor projections, the ballooning cost of Democratic policy promises and a reluctance to make long-term sweeping cuts have added to the deficit at a time when the governor regularly touts California’s place as the fourth-largest economy in the world.

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Trump implemented a series of tariffs on all imported goods, higher taxes on items from Mexico, Canada and China, and specific levies on products and materials such as autos and aluminum, in April. The president has backed down from some of his tariffs, but Newsom alleges that the policies and economic uncertainty will lead to higher unemployment, inflation, lower GDP projections and less capital gains revenue for California.

California filed a lawsuit last month contending that Trump lacks the authority to impose tariffs on his own. On Tuesday, the state said it will seek a preliminary injunction to freeze the tariffs in federal court.

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Politics

Video: The Efforts to Erase Black History

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Video: The Efforts to Erase Black History

President Trump’s executive orders have sought to reframe the history of race and culture in America. Erica L. Green, a White House correspondent for The New York Times, describes how the orders have led to the erasing of history of the Black experience.

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Judge Boasberg orders Rubio to refer Trump officials' Signal messages to DOJ to ensure preservation

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Judge Boasberg orders Rubio to refer Trump officials' Signal messages to DOJ to ensure preservation

NEWYou can now listen to Fox News articles!

A federal judge on Friday ordered Secretary of State Marco Rubio, who is also serving as the acting archivist, to collect any Signal messages belonging to top Trump officials that could be at risk of deletion and to refer those messages to the Department of Justice for further review.

Judge James Boasberg said his hands were tied beyond that and that he could not do anything about Signal messages that had already been deleted.

Boasberg’s order came in response to a watchdog group suing five of President Donald Trump’s Cabinet members, including Rubio, after the Atlantic published a story revealing their Signal chat discussing imminent plans to conduct airstrikes against the Houthis in Yemen.

Boasberg, who has become one of Trump’s top judicial nemeses because of his rulings in an unrelated immigration case, said the court record shows that the five Trump officials “have thus far neglected to fulfill their duties” under the Federal Records Act.

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JUDGE IN CROSSHAIRS OF TRUMP DEPORTATION CASE ORDERS PRESERVATION OF SIGNAL MESSAGES

U.S. Secretary of State Marco Rubio announced new policies surrounding visas. (Anna Moneymaker/Getty Images)

The judge said American Oversight, the left-leaning watchdog that brought the lawsuit, made a strong case that the Cabinet officials have used Signal, an encrypted messaging app, to communicate for work purposes and that they have allowed the messages to auto-delete, likely rendering them permanently lost.

But in the context of the Federal Records Act, Boasberg said he had limited options to address American Oversight’s allegations aside from demanding that Rubio ask Attorney General Pam Bondi to ensure compliance with the law for existing Signal messages that were at risk of deletion.

Chioma Chukwu, executive director of American Oversight, indicated in a statement that the group’s lawsuit was over for now but that it was “fully prepared” to sue again if it found the Trump administration failed to comply with Boabsberg’s order.

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JUDGE TELLS GOVERNMENT WATCHDOGS FIRED BY TRUMP THERE’S NOT MUCH SHE CAN DO FOR THEM

Hegseth and Signal app

“It should never have required court intervention to compel the acting Archivist and other agency heads to perform their basic legal duties, let alone to refer the matter to the Attorney General for enforcement,” Chukwu said.

The explosive Signal incident involved Rubio, Secretary of Defense Pete Hegseth, CIA Director John Ratcliffe, Director of National Intelligence Tulsi Gabbard, and others communicating about their attack plans in a chat group after then-National Security Adviser Mike Waltz apparently accidentally added an Atlantic journalist to the chat.

 

The Trump administration denied wrongdoing and insisted the communication was not “classified.” Bondi dodged a question during a press conference about investigating the incident and instead doubled down on the White House’s claims that the chat was merely “sensitive” and not “classified.”

The Pentagon inspector general launched an investigation into the incident in April in response to a bipartisan request from the Senate Armed Services Committee.

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Supreme Court joins Trump and GOP in targeting California's emission standards

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Supreme Court joins Trump and GOP in targeting California's emission standards

The Supreme Court on Friday joined President Trump and congressional Republicans in siding with the oil and gas industry in its challenge to California’s drive for electric vehicles.

In a 7-2 decision, the justices revived the industry’s lawsuit and ruled that fuel makers had standing to sue over California’s strict emissions standards.

The suit argued that California and the Environmental Protection Agency under President Biden were abusing their power by relying on the 1970s-era rule for fighting smog as a means of combating climate change in the 21st century.

California’s new emissions standards “did not target a local California air-quality problem — as they say is required by the Clean Air Act — but instead were designed to address global climate change,” Justice Brett M. Kavanaugh wrote, using italics to described the industry’s position.

The court did not rule on the suit itself but he said the fuel makers had standing to sue because they would be injured by the state’s rule.

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“The fuel producers make money by selling fuel. Therefore, the decrease in purchases of gasoline and other liquid fuels resulting from the California regulations hurts their bottom line,” Kavanaugh said.

Only Justices Sonia Sotomayor and Ketanji Brown Jackson disagreed.

Jackson questioned why the court would “revive a fuel-industry lawsuit that all agree will soon be moot (and is largely moot already). … This case gives fodder to the unfortunate perception that moneyed interests enjoy an easier road to relief in this Court than ordinary citizens.”

But the outcome was overshadowed by the recent actions of Trump and congressional Republicans.

With Trump’s backing, the House and Senate adopted measures disapproving regulations adopted by the Biden administration that would have allowed California to enforce broad new regulations to require “zero emissions” cars and trucks.

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Trump said the new rules adopted by Congress were designed to displace California as the nation’s leader in fighting air pollution and greenhouse gases.

In a bill-signing ceremony at the White House, he said the disapproval measures “will prevent California’s attempt to impose a nationwide electric vehicle mandate and to regulate national fuel economy by regulating carbon emissions.”

“Our Constitution does not allow one state special status to create standards that limit consumer choice and impose an electric vehicle mandate upon the entire nation,” he said.

In response to Friday’s decision, California Atty. Gen. Rob Bonta said “the fight for fight for clean air is far from over. While we are disappointed by the Supreme Court’s decision to allow this case to go forward in the lower court, we will continue to vigorously defend California’s authority under the Clean Air Act.”

Some environmentalists said the decision greenlights future lawsuits from industry and polluters.

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“This is a dangerous precedent from a court hellbent on protecting corporate interests,” said David Pettit, an attorney at the Center for Biological Diversity’s Climate Law Institute. “This decision opens the door to more oil industry lawsuits attacking states’ ability to protect their residents and wildlife from climate change.”

Times staff writer Tony Briscoe, in Los Angeles, contributed to this report.

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