California Official Says ‘Erratic’ Trade Policies Harm State

(Bloomberg) -- California Lieutenant Governor Eleni Kounalakis, a former U.S. ambassador to Hungary, said the Trump administration’s “reckless and erratic” approach to trade can disproportionately harm her state, the world’s fifth-largest economy.

At an informational meeting of lawmakers in Sacramento, Kounalakis highlighted the trade dispute between the U.S. and China and the threat from President Donald Trump via Twitter to levy tariffs against Mexico over the flow of undocumented people across its border into the U.S.

“As a former U.S. ambassador, I am unaware of any time in recent history that a president has used the threat of tariffs against a friendly nation, to force action on a separate foreign policy issue, in this case, immigration,” said Kounalakis, a Democrat who took office in January.

“It’s reckless and erratic,” she said. “The public is hearing about proposed policy via Tweets from the president, and the White House is using presidential powers to circumvent Congress, and often to circumvent its own advisers and government agencies.”

California is particularly vulnerable to risks of trade disputes: It exports $323 billion in goods and services and imports $440 billion in goods. The value of its exports to Mexico alone is larger than the budgets of 41 states, Kounalakis said. About 20% of Californian jobs depend on international trade.

Already, the ports of Los Angeles and Long Beach have reported a 14% drop in the dollar value of shipments to China in the first quarter this year compared to the same period last year, she said.

Harming the state’s economy will hurt the nation, Kounalakis said. “It doesn’t make any kind of rational sense,” she said. “It is self harm.”

©2019 Bloomberg L.P.

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