California, the U.S.'s economic powerhouse, has launched a legal battle against the Trump administration over tariffs that Governor Gavin Newsom claims are "unlawful" and destabilizing global trade. The lawsuit, filed in the U.S. District Court for the Northern District of California, challenges the president's authority to impose sweeping tariffs under the International Emergency Economic Powers Act.
Newsom emphasized California's pivotal role in U.S. trade, stating that 40% of the nation's goods move through its ports, with half of those imports originating from China. "No state will be impacted more," he warned, noting that $675 billion in two-way trade—including $67 billion in exports to Mexico, Canada, and China—supports millions of jobs.
The World Trade Organization echoed concerns, projecting a 0.2% decline in global merchandise trade by 2025, with North American exports expected to plummet 12.6% this year. Analysts warn the tariffs could reshape supply chains and investment flows across Asia, particularly for businesses tied to California's tech and manufacturing sectors.
As the first state to challenge the tariffs in court, California's move signals growing tensions between U.S. states and federal trade policies. The outcome could set precedents affecting Asian markets and trans-Pacific partnerships.
