California’s tech and agriculture sectors in crisis as tariffs slam key exports

California – President Donald Trump’s latest round of tariffs could deliver a significant blow to California’s economy, potentially disrupting key industries like automobiles, computer equipment, and semiconductors, according to a new study from the Public Policy Institute of California.

California’s economy is heavily reliant on trade, with 16% of the state’s 2024 GDP—approximately $675 billion—coming from the export of physical goods. Manufactured goods make up 87% of these exports, totaling $159 billion, with leading sectors including computer equipment, semiconductors, aerospace products, and precision instruments. Additionally, California leads the nation in agricultural exports, with $15 billion worth of goods such as nuts, processed fruits, and fresh produce shipped worldwide.

The new tariffs impose a 10% duty on imports from U.S. trading partners starting this Saturday, with additional tariffs on roughly 60 countries set to take effect on April 9. Trump’s latest tariff schedule includes a 34% tax on imports from China, 20% on European Union imports, 25% on South Korea, 24% on Japan, and 32% on Taiwan. While Mexico and Canada are exempt from these new tariffs, the 25% duties imposed on them last month remain in place.

Economic experts warn that these tariffs could have wide-ranging consequences for California businesses and consumers. Daniel Payares-Montoya, a research associate at the Public Policy Institute of California, highlighted concerns over how these tariffs could impact both producers and consumers. “Tariffs on imported goods may have direct effects on consumers, producers, and exporters in the state,” he wrote in the study.

The impact is already being felt in specific industries. The San Francisco Chronicle reports that tariffs on Canadian lumber could increase prices or even lead to shortages of essential household products like toilet paper and paper towels. Northern bleached softwood kraft pulp, a key material in these products, is primarily sourced from Canada and has no American-made substitute. Additionally, tariffs on clothing and textiles could lead to higher prices for consumers, according to the Yale Budget Lab.

California’s housing sector is also bracing for difficulties, as tariffs could drive up construction costs and make it more challenging to finance and complete housing projects. This is particularly concerning as officials work to rebuild communities like Altadena, Malibu, and Pacific Palisades after the devastating wildfires in January.

While the tariffs are intended to target unfair trade practices, Wall Street analysts are growing increasingly concerned about the economic fallout. Financial firms now predict a 50% chance of a recession, with estimates likely to shift as uncertainty continues to grip the economy.