Christine Gemperle (01:46):
Hello, my name is Christine Gemperle, and I would like to welcome everyone here to Gemperle Orchards. My brother and I have been farming almonds here in Ceres since 1998. We're a two-person operation, and are representative of the many small and medium-sized family farms in the state.
(02:04)
We come from a long line of farmers, but our California history isn't old. Our father came here in the 1960s from Switzerland to start farming almonds and poultry with his brother, and that operation still exists today.
(02:18)
My brother and I have been through a lot over the last 27 years, including three droughts and one pandemic, which have all brought their unique hardships, and now we're about to face another. As many know, we are lucky enough to live in one of the few places on this planet that have the perfect climate, soils and water infrastructure to support growing a highly nutritious crop, almonds.
(02:43)
Because they can only be grown in a few places, global markets rely on us to provide almonds, and we rely on their consumption, but tariffs have the ability to disrupt those relationships that have been built, some over decades.
(03:01)
We rely on those same global markets to supply us with materials we need to build farm equipment, irrigation systems, and fertilized fields. Will we be able to access what we need to grow our crops, and if so, will we even be able to afford it?
(03:19)
Because seasons determine when crops are planted and harvested, we do not have the luxury to wait years for factories to be built or supply chains to grow. Regardless of all the scientific and engineering advances, farming is still hard work, and the weather makes every year a gamble.
(03:41)
The last thing we need is more uncertainty and not knowing whether we can ride this one out. With that, I'd like to thank Governor Newsom for being here today, and I would like to introduce Chris Murphy from Sierra Pacific Warehouse Group.
Chris Murphy (04:01):
Thank you. Thank you, Christine.
Christine Gemperle (04:01):
You're welcome.
Chris Murphy (04:03):
Thanks guys for being here. Hi, Chris Murphy, Sierra Pacific Warehouse Group. I'm the CEO. We are a family business, central California, our third generation with our fourth just recently born. California is a crucial part in the lifeline of our national supply chain. It involves so many suppliers, manufacturers, countries from all around the world, and domestically here. Our dynamic food industry gives us a unique role in feeding America.
(04:29)
Many of our customers supply across the United States, blending imports, along with domestic products, to feed the world and the United States' supply chains, retailers. These same local producers export to strategic markets around the world. The supply chain and our customers, they rely on dependable and trustworthy long-term partners, and we need to be a reliable and trustworthy trading partner with the rest of the world. So I think that we all work together, the supply chain's interconnected, there's so many moving parts, and it's something that we all should rally around. So thank you, and I'd like to introduce Attorney General Rob Bonta.
Attorney General Rob Bonta (05:12):
Thanks.
Chris Murphy (05:12):
Thanks.
Attorney General Rob Bonta (05:13):
Thank you.
Chris Murphy (05:13):
Thank you.
Attorney General Rob Bonta (05:14):
Thank you all for being here and taking the trip. I want to thank Christine and Chris for sharing their stories, and speaking up about the impact on their businesses and California businesses generally. Rob Bonta, California Attorney General. And we're here because President Trump's rogue and erratic tariffs are wreaking havoc on our nation's financial systems, and causing uniquely immense harm to California's economy, the fifth-largest economy in the world and a major driver of our national economy.
(05:52)
Together with Governor Newsom, I'm filing our 14th lawsuit against the President in less than 14 weeks. This one challenging the tariffs he unlawfully imposed under the International Emergency Economic Powers Act. We're asking the court to rein in the President, restore to our economy, and uphold the Constitution. The president is, yet again, acting as if he's above the law. He isn't. He is yet again violating the U.S. Constitution, overriding Congress's authority, and breaching the separation of powers. It's simple. Trump does not have the authority to impose these tariffs. He must be stopped.
(06:48)
Before I get into the nitty-gritty, I want to express my great appreciation to Governor Newsom and his team for their leadership on this issue, and many issues, and their partnership and collaboration with us on this case. We're proud to work with them as always. And I want to recognize my team at the Department of Justice, especially the individuals in the government law section who worked tirelessly to make this lawsuit possible. It's an honor to work alongside so many dedicated public servants, both at the DOJ and in the governor's office.
(07:20)
The gravity and instability of the situation at hand cannot be overstated. The risk to California, to our businesses, our workers, our families cannot be overstated. As of April 2nd, Trump has imposed tariffs on every single one of the U.S.'s trade partners, sending shockwaves around the globe. On average, the tariffs are more than 22%, the highest in more than a century. For some trade partners, the tariffs are much steeper. Tariffs on our neighbors, Mexico and Canada, are 25% for more than half of goods. Canada has responded with a 25% retaliatory tariff, including on fresh produce and wine from California. The tariffs on China are now at an astronomical 145%.
(08:15)
In response, China has retaliated with 125% tariff on U.S., including on California nuts and dairy products. Just two days after Trump announced his most sweeping tariffs, the U.S. stock market suffered the largest two-day loss in history. One analysis projects that the tariffs will make the U.S. economy, quote, "Permanently smaller by $100 billion annually," end quote. And another found that Trump's tariffs will cost the average American household $2,100 per year. Nothing resembling Trump's campaign promises to fix economy and make life more affordable for Californians and for Americans. Given California's enormous economic footprint, the impact of these tariffs on our state, our businesses, our people is especially harmful. California is the nation's largest importer and second-largest exporter, the largest when it comes to agricultural exports. In 2022, California's agricultural exports brought in nearly $24 billion. Mexico, Canada, and China happen to be our biggest trade partners. Over 40% of California's imports come from those three countries, and they're our top three export destinations, buying close to $67 billion in California exports, over one third of all of our exported goods.
(09:45)
Trump's tariffs are already hampering the state's ability as a major purchaser of goods ourselves, to contract for purchase and sell goods. Already, vendors have warned us that they're going to pass the cost of Trump's tariffs onto the state of California. Trump may claim he's a great businessman, but Trump's tariffs are truly terrible for business, and they're breaking the law.
(10:15)
Let's get to our lawsuit. It focuses specifically on tariffs unlawfully imposed by executive orders that claim authorization under what's known as the International Emergency Economic Powers Act, or IEEPA. This is important, because Trump claims this law is the reason he can impose these tariffs, and he is wrong. The truth is the IEEPA does not apply here. Trump has had to resort to creating bogus national emergencies that defy reason. He's even claimed there was an influx of illegal immigration and illicit drugs crossing over the Canadian border as the basis for imposing across-the-board tariffs on Canada. It is completely untrue.
(11:03)
In actuality, less than 1% of fentanyl and illegal crossings actually come from Canada. The reality is, the U.S. Constitution gives Congress the power of the purse. It's Congress's responsibility to set and collect taxes, duties, and excises, including, yes, tariffs, not the president's. Congress hasn't authorized these tariffs, much less authorized imposing tariffs only to increase them, then pause them, then eminently reinstate them on a whim, causing our nation and the global economy whiplash.
(11:41)
Trump is attempting to override Congress and steamroll the separation of powers. That means he's trampling over his own party, by the way, which currently controls Congress. Again, Congress hasn't given him the authority to impose these sweeping and chaotic tariffs pursuant to emergency powers, which means he can't do it. Bottom line, Trump doesn't have the singular power to radically upend the country's economic landscape. That's not how our democracy works.
(12:13)
Trump may claim these tariffs send a message to our international partners, but Americans are the ones shouldering the burden. The message Americans are receiving is that your costs are going up. The farmers here in the Central Valley, the small businesses up and down the state, the families sweating over their household budgets to see where exactly they can squeeze out the extra thousands of dollars each year that these tariffs could cost. The cost of groceries and gas and other goods are rising. The cost of bananas, coffee, chocolate, wine, iPhones, video games, clothes, all on the rise. As Republican Senator Ted Cruz said, quote, "Tariffs are a tax on consumers," end quote.
Attorney General Rob Bonta (13:00):
… couldn't say it more clearly and we're feeling it. Seniors looking at their retirement savings are feeling it. Parents looking at the college funds they've built up for years are feeling it. Farmers looking at the crops they're counting on to support their families and pay their workers are feeling it. Trump's tariffs are a slap in the face to Americans, especially hard-working families just trying to get by. It's time to put this chaos to an end. It's time to hold Trump accountable to the law, with this lawsuit we are.
(13:35)
As attorney general it's my job to ensure California remains the best place to live, to work, raise a family, or run a business. That's exactly what I'm doing today. I'm proud to be alongside our great governor to fight for California's vibrant economy, businesses, workers and families. And before I pass it off to my partner on this lawsuit, Governor Newsom, I want to give a final shout out to the folks on my team who work tirelessly on this lawsuit. They don't do it for the recognition, but I'm going to recognize them. Zelda Vassar, Carolyn Downs, Laura Haddad, Siobhan Shay, Julie Viroff, Matthew Wise, Thomas Patterson, Christina Bull-Arnt, Ellie Blue. We have a great team and I'm proud of them. Incredible public servants, each and every one of them.
(14:20)
With that, it's my great pleasure to introduce our great governor, Governor Gavin Newsom.
Chris Murphy (14:28):
Thanks, Rob. Thank you, Mr. Attorney General and most importantly, thank you Christine for having us and hosting us, and thank you Chris for your stewardship and leadership and willingness to be here and step up at this critical moment. Look, I think the Attorney General did an exceptional job in laying out the framework of this lawsuit and the why as it relates to the particular issues under the IEEPA, and notably issues that have been brought to the fore as it relates to the major questions doctrine recently by the Supreme Court.
(15:01)
I would just highlight just two of the specific examples the Supreme Court used as it relates to the major questions doctrine on the issue of student loans under the Biden administration on the Clean Power Plan under the Obama administration. If they're consistent, then this lawsuit is a lock in terms of what the Attorney General has laid out and what this state is asserting. But I want to tell you what our state of mind is as it relates to the issues that impact the state of California, obviously the state of our union and the state of the economy more globally.
(15:36)
We talk often about California being the fifth-largest economy in the world. That is correct. We're also the largest manufacturing state in the United States of America, $412 billion output. And I want to put that in perspective. Texas is 41% smaller, it's a 41% larger share of manufacturing output just here in the great state of California. Puts in perspective something that often isn't communicated, I think as effectively as it should be. By the way, United States is the second-largest manufacturer in the world, which is also something that I think is important to highlight. So the manufacturing footprint in this state is disproportionately impacted by the tariffs, disproportionate to any other state in the nation.
(16:23)
Of course, we talk about the fifth-largest economy in the world. Let's put that in perspective. We're 14% of the US GDP that is 50% higher than the next state. No other state will be more impacted by the impacts of this as Christine said, uncertainty that is best described as toxic uncertainty because of these tariffs. Let me underscore that with more consideration and context to where we are. We are also the largest hunting, fishing, agriculture and forestry straight in this nation. 150% larger than the next state, Texas. Folks, talk to us about the impacts, regional impacts of rural economies. You're talking about California, you're not just talking about the Midwest and places like Texas, you're talking about our state, the state of California. Almonds. Almonds you see around us, export dependent. Pistachios, export dependent. Dairy, export dependent. In fact, 43% of almonds and pistachios and dairy are export dependent in the state of California. Few industries will be hammered more than the toxic uncertainty of these Trump tariffs.
(17:44)
The impacts. What more evidence do you need? Check your 401(k), check your portfolio. If it includes NVIDIA, you should check it right now. NVIDIA, the great California company, one highlighted by the same Trump administration over the course of the last 24 to 48 hours, just got hit today with a $5.5 billion charge. Great California company got hit with a $5.5 billion charge sending the markets to tumble yet again today, NASDAQ down over 2% as I speak. The uncertainty is pronounced and it is profound in the state of California. Consider just the imports coming from Mexico, Canada, and China. 44% of all of the imports into the state of California alone come from just those three countries, $197.3 billion in 2023. The impacts of these tariffs, particularly on those three countries, disproportionately impact the state of California. Across the spectrum, the impacts are off the charts. We talk about regional disparities. The impact in counties like this, like Kern, rural parts of the state, will be outsized. It's not just the coast IT technology. Think about the impacts already in the mega region of Baja and San Diego.
(19:23)
Chris, you were talking about the integration of supply chains in a deeper appreciation understanding, decades and decades forming relationship, building trust, manufacturing one side of the border, assembling on the other side of the border, you think about the impacts, the automobile industry, electronics, aerospace. In our state alone, disproportionate impacts. So California, why California? Well, that's why no state is poised to lose more than the state of California.
(19:56)
So that's our state of mind and that's why we're asserting ourselves on behalf of 40 million Americans. And I imagine if you caucus those 40 million Americans, you'd find few, I don't care where they were in the last election, that are celebrating this uncertainty, that are celebrating the largest tax increase in modern US history. In essence, a sales tax. In essence, a sales tax. A regressive sales tax that hurts working folks, that hurts poor folks, that hurts hardworking folks like Christine and those that Chris represents Disproportionately, this is recklessness at another level.
(20:42)
The geopolitical impacts are outsized, the trade impacts are outsized, not just the economic. That's why we were up in Canada making a case anew to try to encourage Canadians. What the hell do we have on the Canadians? Mocking people in another country, one of our great partners, talking about being a 51st state. The fact that we had to invest in advertising up in Canada to encourage people to come to the great state of California where 2 million Canadians visited last year is a sign of the times, a testament to the moment we're living in. We're 2,000 miles away from Washington DC, we're a world away from the values that are emanating out of the White House. Again, that's why we're here. That's why we are asserting ourselves. I can't imagine anything more unifying for a state at this moment than stepping up as we're stepping up here today on this critical issue. So I just again, want to thank the Attorney General who has not been timid. He mentioned 14 lawsuits. We overall have 15 when you had the one wasn't directly involved in. I want to thank him and I want to thank the legislature. Don't forget. We did a special session, seems like a lifetime ago, it was just a few months ago saying we have an open hand, not a closed fist, and it was a sincere sentiment. We didn't want to go down this path. We were hoping we didn't need to go down this path, but we prepared to go down this path.
(22:19)
And so I'm grateful not just to the Attorney General, but to all of those members of his staff that he called out. I want to thank them for their partnership, their stewardship, the legislature. The same for recognizing the severity of this moment. We talk about on goals. We talk about stupidity. This needs to be updated in the next Wikipedia or the next encyclopedia as a poster child for that. It's a serious and sober moment. And I'd be, in closing, lying to you if I said it can be quickly undone and that's why we have a unique responsibility to do more at this moment as well. I've been involved in I think 19 or so MOUs with countries around the world. We've been reaching out to foreign leaders, they've been reaching out to us and the critical nature of sub-national trade and people to people relationship cannot be understated at this moment, and California can and will play an outsized role in that relationship. We have got to rebuild trust.
(23:39)
80 years of economic dominance in just a matter of weeks being unwound by this kind of recklessness. And so we are here very mindful of the anxiety that this is imposed on all of you and very mindful of our role and responsibility at this moment, not to be bystanders and try to shape this debate and shape this conversation in this lawsuit is a meaningful and justifiable effort to do just that. To be accountable at this critical moment in not just California history, but American and world history. With that, we're here to answer any questions.
(24:25)
Well, how can you not be? I've got four kids, 80% of their toys under their Christmas tree come from China. I've got family members living paycheck to paycheck, many family members. My mom who passed away years and years ago was one of them. I mean, no rationale, no plan, no conscience to what it's doing to real people, no consideration of Congressional responsibility. Where the hell is Congress? Where the hell is Speaker Johnson? Do your job. They're sitting there passively as this guy wrecks the economy in the United States of America, which has dominated the global economy. Don't take my word for it, the Wall Street Journal, we are the envy to the world. And overnight a wrecking ball to America's reputation, our role and our relationship.
(25:24)
And so yeah, I am angry, as a parent, as a taxpayer, as someone who has a retirement account. They didn't come from wealth, no trust funds in my family. Worked hard all my life. A guy who has businesses. I know I'm blind trust and I trust you can appreciate, but I won't try to cross the line on that. But if someone has built a business that also is export dependent, some of them, industries like ag that I'm involved in, I have
Chris Murphy (26:00):
Have a unique understanding, it's not an academic understanding, of the stress that folks are going through. And so it connects on every level. And so yeah, I'm angry about this.
Journalists (26:12):
Governor, you've been very reticent to embrace we talked about Trump [inaudible 00:26:17] you famously hated that phrase.
Chris Murphy (26:19):
Well you used it. I didn't. That's why.
Journalists (26:21):
Yeah, can you talk about why you're embracing this moment to be more aggressive [inaudible 00:26:26] it's been two weeks since the tariffs took effect, why now?
Chris Murphy (26:29):
Because for the last few weeks we've been absorbing the impacts. We've been looking at the law, we've been coordinating and collaborating with our Attorney General. We've been talking to other states and we're the first mover, and that's what California does. Every one of the lawsuits that have been mentioned we have been part of. We're funding, we're working in collaboration and partnerships. So why now? Well that's pretty consistent with past practice. And you may recall we were involved in 122 lawsuits against the Trump Administration and Trump 1.0, add this, the 15, it's 137. There's no more, I think, assertive state in our union that's standing up for the state of this union than the State of California.
Speaker 1 (27:19):
Mr. Governor, I'm wondering if you can talk a little bit more about the response you've gotten from those world of leaders that you asked to spare California from the tariffs.
Chris Murphy (27:26):
Well, we have great relationships. Not good relationships, great relationships. You've seen, they've shared, not just me, some of the recent meetings we've had with the ambassador to Germany, ambassador to UK to the premier just 48 hours ago, the premier of British Columbia. Those are just three recent examples and that doesn't even include all the other private conversations I've had that we're respecting the privacy. All the outreach, the MOUs that people looking to see if we can update the relationships they're trying to maintain and the imperative. They want to know that we're a stable partner. They want to know we're not going to turn their back as this administration's turned their back on our allies and they want to know that we're going to continue to have their back as it relates to addressing the anxiety and uncertainty, particularly as it relates to their making a case. And I find this interesting making a case that we don't even need to make, but they're making, that California's not this administration in terms of policy in context of retaliatory tariffs.
(28:42)
Now I have no authority in terms of international trade. I recognize the limitations. That said, during the Governor's Office of Business we created an international arm. We've been very proactive, very aggressive. Lieutenant Governor's been a leader and point person in that respect, and so we're building on that work and we're building on those relationships and we have lined up many, many subsequent meetings. And I think the Visit California announcement we made 48 hours ago is indicative of the kind of proactive work we'll be doing to reach out to our trading partners and make the case that California has their back and we want them back visiting the state, we want them continuing to trade with this state, we want to continue to maintain our dominance.
(29:26)
I, by the way, I haven't even brought up the port of LA, the Port of Long Beach and the fact that 40% of the goods movement in this country comes through those two ports. I haven't even brought up the pizza shops and the coffee shops that are disproportionately dependent on that trade every single day. I mean, this is not even complicated. The impacts of small businesses that cannot pass along these increased costs that are losing customers. The impacts, and I want to speak for Chris and others, but the impacts already on the lack of investment. Any business person, small or large, uncertainty is the number one enemy. Just give us certainty. The one certainty that is only certainty we have is uncertainty that literally on a whim, day to day, hour to hour, phone call from a donor to a phone call from another donor, that they will be a waiver. There will be an exemption.
(30:33)
I mean from free capitalism to crony capitalism just like that. Corruption, this is the personification of corruption. I appreciate the press. You chase this for a living. This is Smash Mouth in your face every minute of every day, every hour and you know it. You've seen it. How in the hell are we sitting by and allowing this to happen? So again, that's the why and that's what we are pushing back against in this lawsuit.
Speaker 2 (31:12):
Mr. Governor, thanks for taking the time. Thanks Attorney General and Christine and Chris for hosting us. Two quick questions. Number one, have you spoken to the President about this? And number two, forgive me, it's unrelated from KRON4 Channel 4 News in the Bay Area, do you have any reaction to the Venetian refinery announcing their… Forgive me, the refinery-
Chris Murphy (31:32):
Yeah, Valero, just briefly on that, respecting the importance of that question. Under our special session, the first special session bill, we advanced, there was a requirement to give notification as it relates to any augmentation operations and or closures for refineries in the State of California. Pursuant to that, we were given notification this morning, late last night, early this morning, made official and we have a year now to address that issue. And I can assure you beginning last night we had all hands and we're in the process of addressing any anxiety that may be created or any market disruption that may be created by that announcement. But we have time pursuant to that special session to mark some progress. And already this morning, first thing this morning, our teams are assembling to advance that progress in concert and partnership with the legislature. On your first question, perhaps you can advance that.
Speaker 2 (32:31):
Yeah, so have you spoken to President Donald Trump-
Chris Murphy (32:33):
I haven't spoken to him directly, but we reached out to the White House to give them heads up.
Speaker 3 (32:41):
Governor, my name's Anahita Jafary, I'm a reporter with KCRA 3 News. Last month we reported how you sent bat phones to the CEOs of the largest companies headquartered in California.
Chris Murphy (32:50):
Were they bat phones? I like that. I like the description bat phones. I'm going to keep that, yeah. Yeah, that's nice, it makes sense.
Speaker 3 (32:59):
[inaudible 00:32:57] programmed into them. Have those CEOs discussed tariffs with you now through this new line of communication?
Chris Murphy (33:03):
Yeah. Well it's interesting. I mean all of them, there's not one that has expressed anything differently. All of them have brought the issue of tariffs up and uncertainty.
Speaker 3 (33:11):
Can you say who you've been talking to? What specifically [inaudible 00:33:15].
Chris Murphy (33:15):
No. I don't want to call them out. Again, the idea of, let me just say just on the meta point in some matter, what the hell bat phones and the governor. So I thought it was important that some of the biggest job creators, we've been doing this, as you know, with our Jobs First plan with small businesses. For the last few years, we've built this framework around regions rising together and I'm really proud of that work.
(33:44)
I felt we needed to do the same for some of the larger employers in the state. And so I reached out to them and I did a burner phone and just put my cell phone in there just with my number. And I wrote a handwritten note to each one of the CEOs saying, "You need something, call me. Here's my cell phone." And to your point and some of your reporting, a lot of them have reached out directly. I will say, full disclosure, a lot of them thought it was fraud. They didn't even know it was real. They didn't even know what was going to happen. So some, we had security personnel call saying "Is this actually from you guys?" So it's been an interesting experiment. I'm just being a little too forthright with you.
(34:23)
But for those that Got it, eventually, many of them just texted said, "I just want to confirm it's you." Those conversations, it just simply hasn't been one of them where terrorists haven't been brought up, period.
Speaker 3 (34:35):
[inaudible 00:34:36] concerns about terrorist attacks?
Chris Murphy (34:37):
Every single one of them have, by definition of course. I mean, it's, I said, the worst ongoing in the history of this country, one of the most self-destructive things that we've experienced in modern American history. I mean the Attorney General just laid out the 22%. Some have estimated as much as 26.7, 27% all in, but you're getting near the Smoot-Hawley numbers that every independent assessment said exacerbated the Great Depression. I mean it's literally comparable to that.
(35:16)
I know a thing or two about China. I sat down with President Xi. This is serious and we need to take it seriously, and, again, no state has more loose.
Speaker 4 (35:33):
How do you think the court's going to respond to this lawsuit?
Chris Murphy (35:36):
I'm sorry?
Speaker 4 (35:36):
How do you think the court's going to respond to this lawsuit?
Chris Murphy (35:38):
Well, I got my attorney here.
Attorney General Rob Bonta (35:43):
We bring lawsuits when we think we're going to win. We've done that in the other 13 lawsuits up to this point. We've had a lot of success in those lawsuits so far, securing temporary restraining orders, preliminary injunctions. The approach here is the same, although its application is different in that it applies to these universal tariffs. It's the idea that the President is exercising authority, that he doesn't have. The President can't do unlawful things. It's really that simple. And he thinks he's above the law, he's not. He thinks he can the constitution and the law and he can't. And so it's up to us to hold him accountable to following the law. And in any court where we will get what courts give a fair and objective hearing, a full review of the facts of complete analysis of the law, we believe we'll be successful. And we believe that in this case.
Speaker 5 (36:36):
Have you been able to calculate and project the economic [inaudible 00:36:42] is there a number you can put out?
Chris Murphy (36:45):
Well, let me give you some proof points just to start just with process considering, just think about the procurement in the State of California, meaning the state buys goods and services. IT, we buy over 10 billion a year in IT and other non-IT goods. The tariffs by definition have already had an impact on the cost of those goods. So that's a direct economic impact. I talked to you about the markets. Why do I bring up the markets? Because the markets in California play an outsized role in our budget. Capital gains plays an outsized role in our budget. Nvidia's success as a company, I gave it a proof point, plays an outsized role in the revenue we generate in this state and our ability to support critical programs, including supporting farmers like Christine. The impacts of that have already forced and compelled me to adjust the budget that I will be submitting in May. The May revise, will reflect a downgrade in economic outlook in this state.
(37:53)
I have been meeting consistently in the last few weeks with economists. Not only state economists, independent economists. Universally, they have significantly downgraded the GDP projections for the State of California next year, have increased as a consequence of this toxic uncertainty the likelihood that our unemployment rate will go up, not down, and that the environment will precipitate in higher inflation. All of those things will inure to slower economic growth, less capital gains revenue, and a significant, from my humble perspective, how significant, stay tuned to the May 15th revise change in our projections as it relates to revenue collection and an adjustment into our baseline spending in order to submit, as I'm constitutionally required, a balanced budget. So the impacts on the budget of this state are
Chris Murphy (39:00):
… already being felt and the full impacts have yet to be fully felt.
Journalists (39:05):
Governor-
Chris Murphy (39:05):
Sorry.
Journalists (39:05):
… I wonder if you can respond to-
Chris Murphy (39:05):
One second, just [inaudible 00:39:06].
Journalists (39:06):
… [inaudible 00:39:06] for tariff of exemptions on almond growers, especially in Stanislaus County, which makes up 18% of the state's almond value, and also a county that has largely backed Trump, why do you think the president will not budge on this?
Chris Murphy (39:25):
Well, look, I want to give the president his due in this respect. I'm old enough to remember in the 1980s, I think, it was a full page ad that President Trump, at the time Donald Trump, businessman, put out complaining about trade policy in the United States vis-a-vis Japan. He's been very consistent on this issue for decades and decades. I give him his due in that respect.
(39:55)
You saw in the first administration, I talk about crony capitalism. I didn't say that lightly. That comes from the basis of an independent analysis of waivers that were provided in the first Trump administration and how they were directly connected to donors to the Republican Party.
(40:19)
He's been consistent for years and years. But this rationale, across the board 10% tariffs, the irrational determination of 145% in China, the fact that he negotiated what he said was a great trade deal, the USMCA, and now he's trashing his own deal, shows a level of recklessness that even I did not anticipate. And I imagine many of his supporters may not, to your question.
(40:54)
I'm here, 'cause I come here often. I'm here because I have responsibility to support people like Christine and those that Chris represents. I'm here not because folks here, I'm very mindful, voted for me or even Kamala Harris. I'm here because they matter and we care. And I'm here because they're disproportionately going to be hurt by this. By the guy that's betrayed them. Donald Trump is betraying the people of the Central Valley. He is betraying the people that supported him. Donald Trump has turned their back… his back on his supporters. We will not turn our back on those that supported Donald Trump. We will have their back. That's why I'm back in the Central Valley.
Journalists (41:45):
Some exemptions for big companies, even in California have been made [inaudible 00:41:51] tariffs, what about small businesses that don't have that visibility?
Chris Murphy (41:54):
That's it. That's by definition crony capitalism. Because you're a fancy CEO, who may have gotten a cell phone and you made the call. That's why I predicated what I said as it relates to the cell phones and the work I've done for small business as a foundational point. And that's why we're here with small business. But that's exactly right. What's their representation?
(42:20)
And that's where states come in. That's where a state of mind to push back, to be firm, to be resolved come in. That's where leadership comes in, Speaker Johnson. It's where leadership comes in. Accountability, responsibility, Speaker Johnson, to have the back of small businesses you claim to represent. Where the hell is Congress?
(42:40)
The best of the Greek democracy, the Roman Republic, three branches of government, independent co-equal branches of government, popular sovereignty, the rule of law. The rule of law. You saw a federal judge today on contempt charges against the administration, or at least asserting probable cause for contempt charges. Criminal charges against the Trump administration on the fundamental rule of law, the principles of our founding fathers, the 250th anniversary of this great Republic we're about to celebrate, that has held this place together, that has bound us together, all of that being challenged. A recklessness, a wrecking ball to the principles of our founding fathers.
(43:24)
So I'm sorry to… you asked me if I'm angry, I'm resolved. That's all. And I'm proud of this state and I'm proud to have an attorney general and a legislature that get it. And I'm proud to have this gift of having some agency and having a little authority as governor to push back against this at this moment.
Journalists (43:52):
Along the lines of the budget, can you talk about California's got a lot of federal funding on like wildfire relief, Medi-Cal. Are you concerned about the Trump administration [inaudible 00:43:59]?
Chris Murphy (44:00):
Well, let me remind you guys of this, California last year as a donor state provided $83.1 billion. It may be worth actually writing this down. $83.1 billion, we provided more to the federal government than we received. By the way, Texas received $71.1 billion more than they provided the federal government. So I'll just remind you of that. California as a donor state, the balance of the books, provided $83.1 billion, Texas took $71.1 billion. Top four states that were donor states, all blue states. Interesting fact.
(44:42)
So when it comes to federal support, we would expect to be treated fairly. And I say this as a donor state that doesn't even get back all of the money that we provide the federal government. I'm proud to have the backs of states that are struggling. I'm proud to have the back of Speaker Johnson's state when they were struggling because of the hurricanes. As a taxpayer, I was proud to support them. And I would hope the same would be extended, and I expect it will be. That's above politics.
(45:16)
I spent 90 minutes in the Oval Office with the president. I've been on the phone with him on multiple occasions. I'll work with President Trump on issues any day of the week that we can work together to advance the cause that I think bind us together. And that's the cause of this state and the fact that we're the tent pole of the American economy, the cause that I think unites us across this country in relationship to this state. And that's my state of mind and I'll maintain it.
(45:44)
I deeply disagree with him on this. I think the overwhelming majority of Americans agree with our position and disagree with his. And I hope they also would find it in their hearts to support those in need, American citizens, that happen to live in the state of California as it relates to the recovery efforts in Los Angeles.
(46:03)
And one last point, 75% of the lumber that the United States imports comes from Canada. I'll repeat that, 75% of the lumber that we import comes from Canada. The cost of rebuilding have already been impacted by these tariffs. In Southern California, the cost of housing has gone up, the cost of the recovery has gone up. I could cite over and over specific examples. We haven't even fully absorbed, to your earlier question, the magnitude of the economic cost already of the recklessness of these tax increases, these tariffs.
Journalists (46:44):
The next question is on back to Judge [inaudible 00:46:48]?
Chris Murphy (47:01):
Yeah, this is the distraction of the day and art of distraction. Don't get distracted by distractions, we say, and here we zig and zag. This is the debate they want. This is their 80-20 issue, as they've described it. Those that believe in the rule of law defending it. But it's a tough case. Because people are really, are they defending MS-13? Are they defending someone who's out of sight out of mind in El Salvador? I mean, we're perfect sheep. So I want to answer your question. I don't know how I add much value answering it. I mean, are you kidding me? Come on.
(47:40)
I remember I saw some punter the other day said, "I remember that Newsom guy when he did gay marriage in 2004. The hell is he talking about? He's kept marrying people, 4,036 couples from 46 states and six countries. What about the rule of law?" Well, maybe they forgot. The judges said there was no irreparable harm. And when the judges, the California Supreme Court, said we should stop, we stopped immediately. It wasn't even in question.
(48:06)
When a judge adjudicates, it's not in question. How in the hell are we even debating that? It's Orwellian that you're debating that. And it's exactly the debate they want. 'Cause they don't want this debate on the tariffs. They don't want to be accountable on markets today. They don't want to answer for Nvidia taking a $5.5 billion charge. They don't want to have a real conversation with Christine and what's going on in terms of the export uncertainty here in the Valley. They want to have this conversation. Don't get distracted by distractions. We're all perfect sheep. Thank you, guys, very much.
