Trump’s tariffs are threatening California’s cash cow
Mar 7, 2025
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Chase DiFeliciantonio, a POLITICO reporter focused on AI and automation policy, discusses the unsettling effects of President Trump's tariffs on California's tech industry. The conversation highlights the anxiety among lawmakers and economists as tech giants like Apple face potential disruptions, impacting stock prices and state budgets. The guest also explores the implications for consumer prices and the urgent need for semiconductor manufacturing, along with the evolving political landscape shaped by these trade policies.
The recent tariffs imposed and rolled back by President Trump are creating significant anxiety in California’s tech industry, threatening the state’s economic stability.
California lawmakers are increasingly focusing on regulating artificial intelligence to ensure safety and address societal implications amid evolving tech policy discussions.
Deep dives
Impact of Tariffs on California's Tech Industry
The recent imposition and subsequent rollback of tariffs by President Trump have raised significant concerns among lawmakers in California, particularly given the state's dependence on the tech industry for tax revenue. Immediate reactions indicate a negative impact on stock valuations of major tech companies, leading to anxiety about California's broader economic stability. With companies like Apple and NVIDIA heavily reliant on international supply chains, the tariffs complicate production and result in economic uncertainty not just for large corporations but also for smaller suppliers along the supply chain. As tariffs remain in place, potential long-term consequences could include rising consumer prices and reduced profits for tech firms, further jeopardizing California's budget.
Political Repercussions of Tariff Policies
Lawmakers in California may begin to leverage the tariffs as a political issue, arguing that these policies ultimately harm both businesses and residents in the state. The interdependence between California's tech sector and state revenue is well-documented, prompting officials to caution against the continued use of tariffs that could stifle economic growth. State Senate budget chair Scott Weiner highlighted the clear link between tech performance and state tax income, suggesting that negative policy outcomes at the federal level could spark political backlash. As Democrats in California voice their discontent with the administration's trade strategies, the tariffs could emerge as a rallying point for opposition against federal policies perceived as detrimental to the state’s economy.
Emerging Legislation in AI and Tech Regulation
California's political landscape is evolving as lawmakers tackle various tech policy issues, particularly in the realm of artificial intelligence. Notable legislation is being introduced to enhance safety regulations around AI, including measures to mitigate biases in automated decision-making systems. The Senate's renewed focus on AI safety reflects a growing recognition of the technology’s implications on society, marking a shift from previous election-centered discussions. With ongoing legislative developments, California is poised to remain at the forefront of national conversations on tech regulation, addressing challenges that emerged from last year's regulatory efforts.
This week, President Donald Trump put tariffs in place — again. He then walked most of them back — again. The administration’s erratic trade policy is also causing a great deal of anxiety in California, where the state budget depends on ample tax revenue from the tech industry. On POLITICO Tech, California tech reporter Chase DiFeliciantonio joins host Steven Overly to explain why lawmakers and economists from Sacramento to Silicon Valley are so nervous.
