California’s merchandise export trade was valued at $15.650 billion in June, according to a Beacon Economics’ analysis of the most recent statistics released by the U.S. Census Bureau’s Foreign Trade Division. That represents a very slight .08% fall-off from the $15.770 billion in exports recorded one year earlier in June 2024.

Over the same period, U.S. exports rose by 3.2% to $179.865 billion from $174.360. As a result, California’s share of the nation’s merchandise export trade dropped to 8.7% from 9.0% one year earlier.

Exports of California’s manufactured products in June edged up by 0.6% year-over-year to $9.526 billion from $9.482 billion. Meanwhile, the state’s shipments abroad of non-manufactured commodities jumped by 13.3% to $1.990 billion from $1.757 billion. However, re-exports fell by 8.8% to $4.134 billion from $4.531 billion in June 2024.

“The June numbers reflect adjustments the global trading system has been making in answer to the “Liberation Day” tariffs President Donald Trump imposed on April 2,” said Jock O’Connell, Beacon Economics’ International Trade Advisor. “June data from California’s major seaports and its international airports indicate even steeper declines in the volume of exports shipped in June.”

During the year’s first-half, California’s merchandise export trade totaled $93.564 billion, up 5.1% from $89.060 in the same period last year.

“The global economy is definitely wobbly. To date, most nations have avoided retaliating significantly to President Trump’s tariffs due to the potential blowback, but that could change rapidly,” said Christopher Thornberg, Founding Partner of Beacon Economics. “The decline in the value of the dollar since the start of the year, however, could help boost numbers in the second half of the year.”

California Accounts For One-Sixth Of All U.S. Imports In Latest Data

The U.S. Commerce Department reports that California was again the nation’s leading state-of-destination for imported goods. Still, while the state’s 15.3% share of all U.S. merchandise imports in June was valued at $40.521 billion, that figure represented a 3.7% decline from the $42.086 billion in imported goods that entered the state in June 2024. 

• Manufactured imports in June dropped by 2.3% to $36.556 billion from $37.422 billion one year earlier.  
  
• Non-manufactured imports were valued at $3.965 billion, down by 15.0% from the $4.664 billion in non-manufactured goods the state imported in June 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., April-June) 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 displays year-over-year changes in California’s merchandise exports. In recent years, eleven commodity groups have posted three-month export totals exceeding $1 billion.

DESTINATIONS

Fourteen foreign markets recorded one billion dollars or more in imports from California in this year’s second quarter. Remarkably, shipments to China continued a precipitous decline as both Japan and Taiwan claimed larger shares of California’s transpacific export trade.
 

In this year’s second quarter, the state’s merchandise export trade with the economies of East Asia rose by 3.7% as the value of shipments across the Pacific totaled $15.923 billion, up from $15.358 billion one year earlier. Meanwhile, California’s exports to Europe jumped by 15.7% to $10.269 billion from $8.872 billion. The state’s exports to Latin America and the Caribbean (excluding Mexico) increased by 2.6% to $2.189 billion from $2.133 billion. Finally, California’s shipments to the nations of Sub-Saharan Africa plunged by 28.8% to $141 million from $199 million.

Mexico and Canada, America’s partners in the Canada-Mexico-US Free Trade Area, combined to account for 26.8% of California’s $47.187 billion merchandise export trade in the latest quarter as the nominal value of shipments to our immediate neighbors declined by 5.5% to $12.662 billion from $13.393 billion.  

MODE OF TRANSPORT

Over half (51.7%) of California’s $47.187 billion merchandise export trade in this year’s second quarter was shipped by air, while waterborne transport accounted for 24.0% of the state’s outbound trade. The balance of the state’s exports largely travelled overland to Canada and Mexico.

THE OUTLOOK

In more normal times, a dollar that had been growing cheaper almost by the day this spring might have yielded a more robust merchandise export trade than we saw in June’s California trade statistics. Similarly, in more normal times. California’s exports of electric vehicles might not have plummeted by 60.6% from the preceding June. Fortunately, most every product manufactured by the state’s computer and semi-conductor industries saw exports more than double from a year earlier as foreign buyers snapped up high-tech products that might be used by President Trump as leverage in his trade negotiations. Curiously, re-exports, which had represented a growing percentage of California’s export trade in recent years, tailed off abruptly in June.

We are now getting a clearer idea of the evolving structure of international trade being carved out by President Trump. Higher levels of U.S. tariffs are taking hold almost across the board, while new bilateral trade agreements continue to be spawned. Regrettably, announcements from the White House about these new arrangements have been distressingly vague in detail and have too often elicited contrary interpretations from the relevant trading partners.

For example, the President’s claim, echoed by his Commerce and Treasury Secretaries, that Japan will entrust $550 billion to a U.S. investment fund controlled by President Trump and that America would receive 90% of the profits from these investments sounded preposterous from the start. And, indeed, Japanese officials have been saying that the $550 billion package would include loans and loan guarantees in addition to actual investments. As for divvying up whatever profits these ventures might yield, Tokyo apparently has no intention of permitting the U.S. to claim a share that is not proportionate to the amounts each party invests. The fact that the agreement was reached with a lame duck Japanese government led by an unpopular prime minister only further complicates any assessment of what can reasonably be expected from the agreement in the future.

A similar divergence in view characterizes the new trade pacts the President is said to have negotiated with South Korea and the European Union. And we have yet to see what emerges from trade talks with Mexico, Canada, and China.

Meanwhile, there are all those new, higher tariffs that President Trump has unilaterally (and perhaps unconstitutionally) imposed on goods entering the United States. And he is proposing additional tariffs, including a threatened 250% levy on imported pharmaceuticals. The immediate impact of higher tariffs is falling most directly on U.S. importers (who actually pay the tariffs) and eventually will fall on American consumers. Yet there is also a ricochet effect that leaves California and other U.S. exporters at the mercy of America’s increasingly aggrieved trading partners. Retaliatory tariffs as well as non-tariff barriers like enhanced phytosanitary regulations are available to our trading partners. But there is also the unhappy reality that American goods are now more likely than ever to face consumer boycotts abroad that could alter consumption preferences and thus have more lasting consequences on U.S. exports.

Understandably, there is now a broad consensus among economic forecasters that the second half of 2025 might see an actual contraction in global trade as the world adjusts to the higher U.S. tariffs, to continued uncertainties about the direction of U.S. trade policy, and to the manifold tensions affecting US-Chinese relations.

Over the long course of America’s commercial relations with the rest of the world, presidents have periodically sought to reduce the nation’s merchandise trade deficit by taking steps to boost American exports, occasionally by driving down the value of the dollar. Although President Trump has largely abandoned such precedents, he has perhaps inadvertently succeeded in making U.S. goods cheaper on the international market, something that could help in the second half of the year. Since he took office on January 20, the dollar has fallen 9.7% against a basket of the currencies of our major trading partners. That alone should have had a salutary impact on the U.S. trade deficit, an accomplishment that the White House should be proud to trumpet.