SACRAMENTO, Calif. (KSWB) -- Governor Gavin Newsom's office announced on Friday plans to shield California's economy from the ripple effects of the Trump administration's escalating tariff war. Newsom is directing his administration to forge a new strategic partnership with international trading par tners. As retaliatory tariffs from countries like China and Canada take hold, Newsom is calling for California-made products to be excluded from such measures, emphasizing in a press release the state’s "commitment to fair, open and mutually beneficial global trade." In a provided statement, Newsom affirmed California’s vital role on the global economic stage, noting that the state's industries, workers and farmers "stand to lose the most" from the sweeping trade restrictions. RELATED: Stock market reacts to President Trump’s tariffs The governor said, "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.” California's economic dominance As the world's fifth-largest economy, according to the governor's office, California is a linchpin of the United States' economic growth. The state boasts the largest import and second-largest export markets in the country, supporting over $675 billion in trade annually and providing millions of jobs across various sectors. The state is not only the leader in agricultural production, but it also holds the top spot in manufacturing and technology. With over 36,000 manufacturing firms employing 1.1 million Californians, Newsom underscored that the Golden State’s economic infrastructure relies on access to international markets. Pursuing strategic partnerships In his newly announced directive, Newsom tasked his administration with identifying collaborative opportunities that protect California's economic interests. He specifically asked his staff to explore ways to: Support job creation and innovation in industries reliant on cross-border trade. Promote economic stability for businesses and workers impacted by federal trade disruptions. Safeguard access to critical supplies, such as construction materials needed for recovery efforts following the devastating Los Angeles firestorms. Newsom's office explained that California is heavily dependent on trade with Mexico, Canada and China. In 2024 alone, the state imported $203 billion worth of goods from these countries, which account for over 40% of the state’s total imports. The state’s economy is also deeply intertwined with its exports, as those three countries collectively bought nearly $67 billion in goods from California in 2024, representing over one-third of the state’s total exports. Potential impacts of tariffs According to the governor's office, the proposed tariffs could have a profound impact on California’s business ecosystem, particularly small businesses engaged in export activities. Many of the state’s 60,000 small business exporters rely on trade with California’s primary international partners and retaliatory tariffs could disrupt these supply chains. Moreover, industries in the state that depend on cost-effective materials for manufacturing and construction are at risk. Products such as timber, steel and aluminum face significant price hikes due to tariffs. The escalating costs could lead to higher consumer prices, directly impacting California households. As noted in Friday's press release, a Yale Budget Lab analysis suggests that the tariffs could result in a 2.3% increase in overall inflation in 2025, including an 8.4% rise in automotive prices and a 2.8% increase in food costs—translating into a financial burden of $3,800 for the average American household, based on the analysis. California's position on global trade Governor Newsom highlighted the state's long-standing commitment to global cooperation and innovation. His office noted that he has signed 38 international agreements with 28 different foreign partners, something he hopes to hang on to. "We value international trade. We value our manufacturing base -- the largest manufacturing economy in the United States of America," Newsom stated. "We look forward to strengthening those ties, strengthen those bonds. I remind all our international trading partners: California is a stable trading partner and we hope you consider that as it relates to California-made products." ...read more read less