California Governor Blames Trump Tariffs for Devastating Impact on Small Businesses

California Governor Gavin Newsom has welcomed federal court rulings that blocked key tariff policies imposed during the Trump administration, but he issued a serious warning that the economic fallout for small businesses is already severe—and could worsen if the contentious tariffs remain in effect. Speaking during a podcast interview with Ben Meiselas, Newsom emphasized, "This has already had an impact, and the impact would be even more acute as it relates to shortages and supply constraints that are inevitable if this continues."

Highlighting the turmoil facing entrepreneurs, Newsom described the current situation as a "chaotic moment" created by the prior administration’s trade measures. "It's self-inflicted by the Trump administration. That chaos continues. The damage has been done," he declared. Newsom recounted meetings with more than a dozen small business owners, many of whom have experienced "complete devastation" due to the ongoing trade war.

Among the stories Newsom shared was that of a woman running a baby products business who fears she may lose her home because of the financial burden imposed by the tariffs. "That's because of Trump's unilateral policies, illegal," Newsom stated, underscoring his belief that the measures were not only harmful, but enacted outside proper legal authority.

The governor also referred to a personal encounter with a family-run business that sells electric bikes. After purchasing a bike for his son, Newsom was contacted directly by the store’s owner, who explained that despite having a full container of inventory, there was no way to afford the new tariffs—putting the entire company at risk of closure. "I said, we have this lawsuit ... I'm looking forward to emailing him back and reminding him of this momentary impact of this federal court decision today that may give him a reprieve," Newsom commented, referencing the possible relief brought by the recent court determinations.

The legal battle over the tariffs intensified after U.S. District Judge Rudolph Contreras ruled that former President Donald Trump lacked the unilateral authority to impose certain levies on behalf of two Illinois toy importers. This decision closely followed another federal court’s move to block additional Trump-era tariffs, finding that emergency powers could not be used to justify the measures.

However, any celebrations have been tempered by subsequent judicial actions. The U.S. Court of Appeals for the Federal Circuit later issued a stay on the Trade Court's ruling, temporarily reinstating a set of so-called "reciprocal" tariffs pending further litigation. Despite this, Contreras’ decision remains in place, although its implementation has been delayed for 14 days to allow for an appeal by the administration.

Newsom lauded the courts’ moves against the tariff policies, labeling the decisions as "rewarding" for small businesses that have shouldered the brunt of the trade war. "California was the first to sue Trump over these unlawful tariffs, and now the courts are saying exactly what we argued from day one," Newsom said. He highlighted the tangible cost suffered by families and entrepreneurs: "Canceled shipments, layoffs, business closures, even parents losing their homes."

The governor reiterated the point that the consequences of tariffs have been profound, particularly on the most vulnerable elements of the economy. "This is real. It's consequential. And it's small businesses, in particular, that are being devastated by this uncertainty," he concluded, calling attention to the urgent need for stability and support as the legal fight over tariffs continues.