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| Image Credit: Geralt/Pixabay & Gage Skidmore/Flickr |
President Trump declared April 2, 2025, Liberation Day. Financial power players and the American public waited quietly in anticipation for an America First symbolic gesture. However, once the burdensome tariffs were announced, they proved to be far steeper than just a symbolic statement. The Financial Times editorial board ominously projected, “If it endures, Donald Trump’s decision on April 2, 2025, to enact sweeping ‘reciprocal’ tariffs on U.S. trade partners will go down as one of the greatest acts of self-harm in American economic history.” These realizations prompted the market to rage back in a dramatic sell-off, plunging its value by trillions, according to Reuters. The chaotic headlines depict an economic scene of absolute destruction. A headline from The Atlantic laments, “Wall Street Blew It.” The anti-tariff billboards affixed by Canada protest, “Tariffs are a tax.” The experts and public officials are predicting near apocalyptic economic and political consequences. Which includes Jeremy Siegel, a professor at the University of Pennsylvania’s Wharton School, who stamped doom in the CNBC article, stating, “I think this is the biggest policy mistake in 95 years.”
In the midst of the tariff fiasco, President Trump reacted calmly and remained resolute, lambasting America’s trade rivals. According to the New York Times, he confidently boarded Air Force One headed towards Florida for a relaxing retreat at his renowned Miami resort to attend his fundraising event. What was even more calmly reported was the tariff’s impact on federalism, which has more crucial consequences for America’s political future. Federalism is structured so that state governments predominantly tend to domestic affairs while the central government has the enumerated and implied powers inscribed within the Constitution to address foreign affairs. But what happens when economic imperatives compel an economic powerhouse of a state to act beyond these bounds, provoked by the belief that the central government is unjustly infringing on their financial growth? In this particular situation, California Governor Newsom has adopted the necessary and proper clause, explicitly granted to the central government by the Constitution, to govern California’s economy. His actions signal that the circumstances have made it necessary and proper for him to save the economic vitality of California by negotiating directly and developing relationships with international trade partners in a bid to bypass President Trump’s tariffs. Especially after former Trump spokesperson Anthony Scaramucci explained on Governor Newsom’s podcast, “What he’s doing is taking us back to the 1930s, with the Smoot-Hawley Act,” evoking the possibility of the tariffs triggering another Great Depression.
Although Governor Newsom is not engaging in an unconstitutional affront to federalism, his actions are very close to usurping the central government’s role in conducting foreign affairs. The Sacramento Bee questioned Governor Gavin’s efforts and motives with the headline, “Gavin Newsom wants California exempted from foreign tariffs. Can he do that?” The article neatly created a loophole by explaining that while Governor Newsom cannot directly negotiate tariff deals with other countries, “… he can negotiate with private companies in other countries and give the incentives to do business with California.”
Governor Newsom has the legal allowance to embark on these actions, but he is infringing on the spirit of federalism, in which the central government and state governments have balanced yet differentiated responsibilities. As Governor Newsom continues to directly appeal to global leaders, these series of slight infringements have grave effects on the core structures upholding American democracy. Despite Newsom’s declaration that he will fight back against President Trump’s tariffs, the Constitution restricts him from “entering into treaties, alliances, or confederations” with foreign nations. Governor Newsom is applying a direct blow to the Constitution by disregarding the boundaries created by federalism, which is reminiscent of the nullification crisis that besieged early America during Andrew Jackson’s administration as South Carolina aggressively resisted the Tariff Acts of 1828 and 1832. Despite the threats of military retaliation, President Andrew Jackson ultimately conceded with the Compromise Tariff Act of 1833. It is troubling that America has regressed to experiencing the same crisis as in its youth.
In a press release, Governor Newsom boldly positioned California against the tariffs: “California leads the nation as the #1 state for agriculture and manufacturing — and it’s our workers, families, and farmers who stand to lose the most from this Trump tax hike and trade war. To our international partners: As the fifth largest economy in the world, the Golden State will remain a steady, reliable partner for generations to come, no matter the turbulence coming out of Washington. California is not Washington, D.C.” If the predictions are correct and President Trump’s tariffs cause America to descend economically, it can spell doom for federalism as California and other economic powerhouse states take increasingly aggressive actions, angling to save themselves at the expense of the nation’s political system. Ted Cruz narrowed in on the terrible political aftermath awaiting the Republicans if the tariffs induce a recession. A bloodbath for the Republicans could be a graveyard for American federalism as we know it if President Trump does not possess the political prowess, desire, or intention to maintain the integrity of federalism.
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