Gov. Gavin Newsom and California Attorney General Rob Bonta filed a request Monday for a preliminary injunction to immediately stop President Donald Trump’s tariffs.
California filed a lawsuit last month seeking a court to nullify the Trump administration’s aggressive trade policies. Opponents of the president’s global trade agenda expect tariffs to impact trade as well as state revenues and budgets, which are currently in development as the new fiscal year’s July 1 start date approaches.
The tariffs challenged in California’s lawsuit are projected to cost California consumers at least $25 billion and cause the loss of more than 64,000 jobs, according to the governor’s office. The high tariffs are projected to cost California households more than $40 billion.
“President Trump has overstepped his authority, and now families, businesses, and our ports are literally paying the price,” Newsom said in a statement. “As the largest economy in the nation, California has the most to lose from President Trump’s weak and reckless policies.”
According to the White House, “President Trump refuses to let the United States be taken advantage of and believes that tariffs are necessary to ensure fair trade, protect American workers, and reduce the trade deficit — this is an emergency.”
The administration claims tariffs will incentivize companies to keep jobs in the U.S. A White House fact sheet noted Zekelman Industries — North America’s largest independent steel pipe and tube manufacturer — has shut down its Long Beach plant and laid off 150 workers “because of Mexico’s steel dumping.”
At a press conference in April, Trump said, “For decades, the United States slashed our trade barriers on other countries, while those nations placed massive tariffs on our products and created outrageous nonmonetary barriers to decimate our industries. They manipulated their currencies, subsidized their exports, stole our intellectual property, imposed exorbitant VAT taxes to disadvantage our products, adopted unfair rules and technical standards and created filthy pollution havens. This all happened with no response from the United States of America, but those days are over.”
Bonta echoed Newsom’s assertion that California is set for a disproportionately large share of economic losses as a result of the tariffs, while noting the need for the court’s immediate action.
“Last fall, Americans at the voting booth demanded lower prices. Now, Trump’s chaotic tariff war is threatening to skyrocket the cost of living for families, lower wages, slash jobs, and throw business owners and innovators into a spiral of uncertainty,” Bonta said in statement. “Let me be clear, uncertainly and unpredictability are bad for business, bad for the economy, and bad for California. California is set to experience an outsized share of losses due to our larger economy, workforce, and exposure to trade. We are pulling out all the stops and will today ask the court to immediately halt these illegal tariffs while California argues its case.”
The governor’s office described California’s $4.1 trillion gross domestic product as the backbone of the United States’ economy, driving national economic growth and contributing to the federal government over $83 billion more than it receives in federal funding.
California is the nation’s top agricultural producer and the center for manufacturing output in the U.S., officials said. The 36,000 manufacturing companies in California employ over 1.1 million people, often in new industries including aerospace, computers and electronics and most recently zero-emission vehicles.
California engaged in nearly $675 billion in two-way trade last year, supporting millions of jobs statewide, Newsom’s office reported.
“The impacts of the president’s tariff policies are already having an outsized impact on the state’s nation-leading ports, leaving California workers with fewer shifts unloading and transporting the goods,” according to the governor’s office. “A decline of just 1% in cargo to the Ports of Los Angeles and Long Beach would wipe away 2,769 jobs and endanger as many as 4,000 others, one study found.”
The rising costs associated with the tariffs will also have ripple effects throughout the supply chain, affecting longshoremen as well as truckers, manufacturers and retailers in California and the nation, officials said.
The state is projecting a $7.8 billion loss in tax revenue from personal income tax, capital gains and corporate revenue as a result of the tariffs impact on taxpayers.
“This extraordinary loss of essential revenue is exacerbated by the unpredictable and chaotic approach to imposing tariffs, which has made it extremely difficult for California and its agencies to effectively budget, plan for the future, and properly serve Californians,” according to the governor’s office.
The tariffs’ negative effects and their uncertain nature are reflected in California’s recently downgraded economic projection for the 2025-26 budget. Newsom’s office expects unemployment and near-term inflation to rise along with significantly downgraded growth projected for worker wages, business income, jobs and personal income.
The Port of Los Angeles import volume decrease one-third compared with the same time last year as of the first week of May, which will affect the availability of goods in stores in the coming weeks, Bonta’s office reported.
The fiscal impacts from tariffs have “immediate and devastating” effects on the state’s budget, which in turn could lead to large cuts to programs and public services, officials said.
Many state agencies, such as the Health Care Services and Public Health departments, contract with vendors to buy goods that were manufactured outside the U.S., including more than $8 billion in pharmaceuticals, $300 million in diabetes-related supplies, $3 million in flu vaccines, $700,000 in disease testing kits and other health-related products.
“The president’s tariffs confront California with significantly increased costs to retain access to these essential goods through its contracts,” according to Newsom’s office.
In recent months citing the federal International Economic Emergency Powers Act of 1977, Trump has issued more than a dozen executive orders imposing, pausing, reimposing and increasing tariffs on every U.S. trading partner.
According to Bonta’s office, while difficult to calculate because of the tariffs’ “frenzied nature,” most estimates place the new average tariff rate at or higher than 25%. The current tariff rate under the IEEPA is 10% on all U.S. trading partners, with tariff increases as high 50% on more than 50 countries set to take effect July 9.
Canada and Mexico are subject to 25% emergency tariffs that are currently in effect after being paused, then restarted.
Tariffs on goods from China totaled 145%, then plummeted to 30% after Trump administration officials and Chinese negotiators agreed Monday to a 90-day pause, according to the White House.
In response major U.S. trading partners including China, Canada and the European Union have imposed or announced retaliatory tariffs. China’s now-paused retaliatory tariffs totaled 125%.
The administration’s rationales for the tariffs range from from trade deficits and foreign trade practices to immigration, crime and illicit drugs including fentanyl.
In the week following Trump’s April 2 announcement of his tariff policy, the S&P 500 lost more than 12% totaling $5 trillion, a record stock market decline not typically seen outside of extreme events such as the COVID-19 pandemic and the 2008 subprime mortgage crisis.
In addition to the preliminary injunction request, California officials said they planned to file an amicus brief in the Court of International Trade in the case Oregon v. Trump, which challenges Trump’s emergency claim for imposing the tariffs.
