California’s merchandise export trade was nominally valued at $16.635 billion in March (the latest data), a healthy 7.7% gain over the $15.440 billion recorded in March 2024, according to Beacon Economics’ analysis of official trade statistics released this morning by the U.S. Census Bureau’s Foreign Trade Division.

Over the same period, U.S. exports in the year’s third month increased by 6.5% to $190.974 billion from $179.326 billion. As a result, California’s share of the nation’s merchandise export trade rose to 8.7% from 8.6% one year earlier. Exports in March from Texas were up by a more modest 4.4%.

Exports of California’s manufactured products in March increased by 6.2% year-over-year to $10.198 billion from $9.604 billion. Meanwhile, the state’s exports of non-manufactured commodities rose by 3.0% to $2.117 billion from $2.056 billion. Re-exports jumped by 14.3% to $4.320 billion from $3.780 billion in March 2024.

“These figures from March precede the April 7 “Liberation Day” tariffs announced by President Trump and the retaliatory tariffs imposed by our trading partners,” said Jock O’Connell, Beacon Economics’ International Trade Advisor. “We do not expect April’s numbers to be anywhere near as robust.”

Christopher Thornberg, Founding Partner of Beacon Economics, said the strong numbers likely represent foreign buyers accelerating their purchases in an attempt to avoid retaliatory tariffs. “This is not unlike the surge we’ve seen in U.S. imports, driven by the same strategic shift,” said Thornberg. “We may see a sharp slowdown in the May numbers even if the trade situation settles down.”

California Importers Try To Get Ahead Of Higher Tariffs

California accounted for one-eighth of all U.S. merchandise imports in March.

The U.S. Commerce Department reports that California was again the nation’s leading state-of-destination for imported goods. The state’s 11.9% share of all U.S. merchandise imports in March was valued at $40.662 billion, a 10.5% gain over the $36.814 billion in imported goods in March 2024 as importers rushed to get ahead of higher tariffs.

• Manufactured imports in March increased by 10.7% to $35.818 billion from $32.362 billion one year earlier.  
• Non-manufactured imports were valued at $4.843 billion, up by 8.8% from the $4.452 billion in non-manufactured goods the state imported in March 2024.    

Please note that Beacon Economics has long taken a skeptical view of the federal government’s state-of-destination statistics. The data’s fundamental shortcoming is that they capture not just goods consumed by California residents or used by California businesses but also a sizable quantity of imported merchandise that is offloaded at California ports but is bound for markets elsewhere in the country.

A CLOSER LOOK AT THE NUMBERS

As always, Beacon Economics advises against reading too much into month-to-month fluctuations in state export statistics, especially when focusing on specific commodities or destinations. Significant variations can occur due to unusual developments or exceptional one-off trades and may not be indicative of underlying trends. For that reason, Beacon Economics compares the latest three months for which data are available (i.e., January-March) with the corresponding period one year earlier. Please note that the numbers cited in this report are nominal values.

LEADING EXPORT COMMODITIES

The table below shows annual changes in California’s merchandise exports. In recent years, eleven commodity groups have posted three-month export totals exceeding $1 billion. In this year’s first quarter, that number has fallen to ten as exports of Waste & Scrap have slipped below the billion-dollar mark. Of the remaining ten categories, nine recorded nominal year-over-year gains since the first quarter of 2024.

DESTINATIONS

Twelve foreign overseas markets recorded one billion dollars or more in imports from California in the first quarter of 2025. Remarkably, China was overtaken by both Japan and Taiwan in the latest list of the leading destinations for California exports.

In the most recent quarter, the state’s merchandise export trade with the economies of East Asia was essentially flat as the value of shipments across the Pacific totaled $14.362 billion, up a negligible 0.3% from $14.320 billion one year earlier. Meanwhile, California’s exports to the European Union increased by 12.9% to $9.172 billion from $8.125 billion one year earlier. The state’s exports to Latin America and the Caribbean (excluding Mexico) grew by 14.8% to $2.525 billion from $2.201 billion. Finally, California’s shipments to the nations of Sub-Saharan Africa fell by 16.4% to $135 million from $161 million.

Mexico and Canada, America’s partners in the Canada-Mexico-US Free Trade Area, combined to account for 29.6% of California’s $46.377 billion merchandise export trade in the latest quarter as the nominal value of shipments to our immediate neighbors grew by 11.4% to $13.697 billion from $12.293 billion.    

MODE OF TRANSPORT

Although news editors routinely favor visuals depicting huge container ships dwarfed by towering cranes when publishing or airing reports on foreign trade, exporting is also likely to involve airplanes and airports. That’s particularly true for California where 48.6% of the state’s $46.377 billion merchandise export trade in this year’s first quarter was shipped by air, while waterborne transport carried 24.0% of the state’s outbound trade. The balance of the state’s exports largely travelled overland to Canada and Mexico.  

THE PORTS

Trade through California ports has remained stable over the last five years, however the mode by which goods are moved has shifted. Airports and Seaports continue to be the primary way by which goods are exported from California ports, but exports have declined at Seaports (-9%) over the last five years. In contrast, exports from Land Ports have grown a substantial 45.6% over this period.

Imports through California ports are up 59.5% over the last five years. Seaports continue to account for the majority of imports through California ports, however these imports have only grown 51.9% over the last five years. Imports through California Airports have doubled over the last five years.

• Total export trade through California ports from January 2025 to March 2025 was up 9.0% over the same period last year. Exports were up through Land Ports (3.2%) and Airports (21.4%), but down at Seaports (-1.4%).
• Total import trade at California ports was up 16.6% over the same period last year. Imports were up through Airports (41.3%), Seaports (11%), and Land Ports (6.6%).
• California ports accounted for 10.6% of exports from the United States between January 2025 and March 2025, up 0.5 percentage points over the same period one year ago.
• California ports accounted for 18.4% of imports into the United States from January 2025 to March 2025, down 1.7 percentage points from the same period one year ago.
• Container counts at the Port of Long Beach grew 27.3% from March 2024 to March 2025.
• Container counts at the Port of Los Angeles grew 8.8% from March 2024 to March 2025.

THE OUTLOOK

We have never seen a more peculiar set of circumstances than those that now frame the world of international trade and investment. Since taking office and especially since his “Liberation Day” tariff announcements on April 7, President Donald Trump has set global commerce adrift from its decades-long moorings. While a fundamental reordering of the global trading system is reasonably in order, it is difficult to see any set of rules the president proposes as a replacement other than his demand that the rest of the world stop “ripping off” America.

According to the White House, the president is pursuing a complex, multi-dimensional negotiating strategy that is beyond the understanding of mere mortal economists. In a sense, that is true. There is hardly an analyst outside of Mr. Trump’s circle of advisors who has been able to discern what the president’s end-game may be. And no one within his circle has been able to realistically explain it.

Around the globe, nations that are generally governed by responsible leaders served by experienced counsellors have been grappling with the challenge of dealing with a powerful individual whose advisors have been unable or unwilling to push back against his remarkably errant notions about international business. Furthermore, given Mr. Trump’s mercurial nature, serious questions are being raised abroad as to the value of any agreement worked out with the president’s emissaries. European Union officials have repeatedly stated that they are perplexed by the president’s demands, which frequently run counter to the most basic laws of economics.

Not surprisingly, economic forecasts that were buoyant just months ago have lately turned uniformly negative. The World Trade Organization now expects a contraction in global merchandise trade. Citing the tariff conflicts and a general mood of policymaking uncertainty, the International Monetary Fund has warned of a “significant slowdown” in global growth as businesses and investors are increasingly loath to take risks. The IMF has also downgraded its outlook for U.S. economic growth from its 2.7% estimate in January to a 1.8% forecast issued in April. J.P. Morgan has complained that President Trump’s tariffs have sent markets tumbling and heightened the prospects of a worldwide recession. Pointing to rising trade tensions and policy uncertainty, the World Economic Forum is warning of a decline in global merchandise trade, including “a significant drop in North American exports.”

California exporters are already contending with higher tariffs, more intrusive non-tariff trade restrictions, and a growing resistance abroad to buying American products. As noted elsewhere in this report, the state’s exports to China in this year’s first quarter were down by 27.0% from one year earlier. Consumers abroad, most notably in neighboring Canada and Mexico, have not responded well to Mr. Trump’s hostile rhetoric, including his scarcely veiled threats to their sovereignty. Canadians have been actively shunning American goods, including California wines, tree nuts, and dairy products. First quarter shipments of California wines to Canada were down 33.7%, while fresh fruit exports fell by 9.4%.

Similarly, a report in yesterday’s New York Times enumerated the instances in which European consumers have turned against America goods, especially such iconic brands as Harley-Davidson motorcycles, Kentucky bourbon, and Levi apparel. Most notably, European sales of Tesla vehicles have plunged by 37.2% in the first quarter even as overall sales of electric vehicles rose by 28.0%.

California Governor Gavin Newsom has sought to inject himself into the foreign trade melee by pleading with other nations to refrain from targeting California exports. However, as much as he may want to distance California from the policies of President Trump, because Silicon Valley billionaires and Central Valley farmers have both been enthusiastic supporters of the president they are seen as fair game for retaliatory measures. More generally, though, the lame duck governor has waded into this controversy without much quid to offer in exchange for the quo he is requesting.