How could Trump’s tariffs impact Californians? Residents rely on Mexico for these goods
Californians could wind up with lighter wallets if President Donald Trump follows through with planned tariffs on three of the state’s biggest trading partners, economic experts said.
On Tuesday, the Trump administration imposed a 10% tariff on China, causing the country to respond with retaliatory tariffs of its own on goods ranging from coal to farm machinery.
Trump previously announced a 25% tariff on goods coming from Mexico and Canada originally set to start Tuesday. Both nations in turn vowed to retaliate against Trump’s tariffs.
On Monday, however, Trump decreed a 30-day pause on the tariffs in exchange for tighter border security and reduced drug trafficking.
As the fifth-largest economy in the world, California heavily relies on its neighbor to the south for a variety of household goods.
Mexico was California’s third largest import partner in the United States in 2023, according to the latest data from the International Trade Administration.
If Mexican tariffs go into effect, here’s how Californians could be impacted.
What are tariffs?
Tariffs are a tax imposed by governments on the value of imported goods, according to the International Trade Administration.
According to economic experts, massive tax hikes on imported goods from Mexico, Canada and China could rapidly increase costs for U.S. consumers and businesses.
Even though Trump has claimed tariffs are paid by other countries, Americans are typically the ones stuck with paying higher prices.
Tariffs are paid by importers — U.S. companies — with the money going to the U.S. Treasury, international trade economist Matthew Cole told The San Luis Obispo Tribune in January.
Those companies, in turn, typically pass costs onto consumers, resulting in higher price tags for products ranging from cars to gas to grocery store staples, said Cole, an associate professor at Cal Poly in San Luis Obispo.
“(With) any good that has a tariff put on, you can expect the price to go up,” he said.
Cole warned that California industries could experience decreased sales from exports if Trump goes through with his tariff plans, possibly sparking retaliatory measures and a full on trade war.
What’s California’s trade relationship with Mexico?
Trump’s proposed tariffs could harm several industries in California.
In 2023, California imported nearly $449.5 billion worth of goods from around the world. The state most heavily relied on imports from China, Mexico, Taiwan, Vietnam and Japan, according to the U.S. Department of Commerce.
Mexico was California’s second-best overall trade partner in 2023.
The state also has five major international border crossings with Mexico.
In total, the state traded nearly $95 billion worth of imported and exported goods in 2023 with Mexico, according to data from the International Trade Administration.
What does California import from Mexico?
The Golden State imported $61.5 billion of goods from Mexico in 2023, ranging from cars and trucks to avocados, bell peppers and tomatoes, the International Trade Administration said.
Out of all 50 states, California imported the third-most amount of goods from Mexico.
Here were the state’s top 10 imports from Mexico:
Motor vehicles: $7.47 billion
Audio and video equipment: $6.58 billion
Fruits and tree nuts: $4.65 billion
Motor vehicle parts: $4.42 billion
Medical equipment and supplies: $2.89 billion
Motor vehicle bodies and trailers: $2.39 billion
Computer equipment: $2.21 billion
Vegetables and melons: $2.13 billion
Navigational, medical and control instruments: $2.03 billion
Electrical equipment and components: $1.7 billion
What does California export to Mexico?
California exported goods worth $33.3 billion to Mexico in 2023, the International Trade Administration said.
The most recent data showed the state took the No. 2 spot in the U.S. for exports to Mexico.
Here are the rankings for the top products California exported to Mexico:
Motor vehicle parts: $2.93 billion
Semiconductors and other electronic components: $1.72 billion
Plastics products: $1.36 billion
Navigational, medical and control instruments: $1.29 billion
Petroleum and coal products: $1.25 billion
Communications equipment: $1.17 billion
Electrical equipment and components: $1.07 billion
Other fabricated metal products: $1 billion
Clothing: $996 million
Other general purpose machinery: $951 million
How much could tariffs cost Californians?
If Trump sticks to his plan to impose tariffs on China, Mexico and Canada, Californians could see prices rise on all kinds of household goods, financial experts said.
“(President) Trump’s planned tariffs would have a profoundly negative impact on working families in California and across the country,” Gov. Gavin Newsom said in a social media post in December. “Make no mistake: this would be a tax on consumers.”
Californians would also have to pay more in taxes.
A new report by the nonpartisan Tax Foundation discovered that Trump’s proposed tariffs would amount to an average tax increase of more than $800 per U.S. household in 2025.
“We estimate the tariffs on Mexico, Canada and China proposed to go into effect ...would shrink economic output by 0.4% and increase taxes by $1.1 trillion between 2025 and 2034 on a conventional basis,” the Tax Foundation said.
This story was originally published February 6, 2025 at 5:00 AM with the headline "How could Trump’s tariffs impact Californians? Residents rely on Mexico for these goods."
