California’s merchandise export trade was nominally valued at $14.942 billion in January (the latest available data), a robust 7.8% gain over the $13.866 billion recorded in January 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 opening month edged up by only 1.3% to $172.779 billion from $170.571 billion. As a result, California’s share of the nation’s merchandise export trade rose to 9.1% from 8.6% one year earlier.

By comparison, exports in January from Texas rose by just 2.6%, while exports from Florida were up just 3.6% year-over-year.

Exports of California’s manufactured products in January increased by 6.3% year-over-year to $9.217 billion from $8.670 billion. Meanwhile, the state’s exports of non-manufactured commodities were up by 4.1% to $1.755 billion from $1.686 billion. Re-exports jumped by 13.7% to $3.970 billion from $3.491 billion in January 2024. 

“Despite being ravaged by urban wildfires and vilified by conservative politicians and pundits, the Golden State continues to outpace its rivals,” said Jock O’Connell, Beacon Economics’ International Trade Advisor.

California Leads Nation On Imports

California accounted for nearly one-fifth of all U.S. merchandise imports in January.

The U.S. Commerce Department reports that California was again the nation’s leading state-of-destination for imported goods. The state’s 19.8% share of all U.S. merchandise imports in January was valued at $43.179 billion, a 16.9% bump over the $36.037 billion in imported goods in January 2024.

• Manufactured imports in January leapt by 17.6% to $38.115 billion from $32.413 billion one year earlier.  
• Non-manufactured imports were valued at $5.064 billion, up by 11.9% from the $4.525 billion in non-manufactured imports the state absorbed in January 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., November-January) 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 the latest three-month period, that number has fallen to ten as exports of Waste & Scrap slipped below the billion-dollar mark. Of the remaining ten categories, all but three recorded nominal year-over-year gains in the latest quarter.

DESTINATIONS

Thirteen overseas markets recorded one billion dollars or more in imports from California in the latest three-month period:

In the latest three months, the state’s overall export trade with the economies of East Asia slipped by 2.9% as the value of shipments fell to $15.009 billion from $15.455 billion one year earlier.

Meanwhile, California’s exports to the European Union strengthened by 12.5% to $9.216 billion from $8.189 billion one year earlier. The state’s exports to Latin America and the Caribbean (excluding Mexico) rose by 5.1% to $2.421 billion from $2.303 billion. California’s shipments to the nations of Sub-Saharan Africa jumped by 75.2% to $285 million from $163 million.

Mexico and Canada, America’s partners in the North American Free Trade Area, together accounted for 27.8% of California’s $45.669 billion merchandise export trade in the latest three months as the nominal value of shipments to our immediate neighbors gained by 6.2% to $12.669 billion from $11.925 billion.    

MODE OF TRANSPORT

In the latest quarter, 47.1% of the state’s $45.669 billion merchandise export trade was shipped by air, while waterborne transport carried 26.4% of the 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 (-5.7%) over the last five years while exports by Land Ports have grown a substantial 50.1%.

Imports through California ports are up 44.5% over the last five years. Seaports continue to account for the majority of the state’s imports, however these imports have only grown 39.3% over the last five years. Imports through California Airports have grown 70% in the last five years.

• Total export trade at California ports from November 2024 to January 2025 was up 8.6% over the same period one year earlier. Exports were up through Seaports (3.1%), Land Ports (13.3%), and Airports (12.5%) over this period.
• Total import trade at California ports from November 2024 to January 2025 was up 20.1% over the same period one year earlier. Imports were up through Airports (32.6%), Seaports (17.4%), and Land Ports (11.9%) over this period.
• California ports accounted for 11% of all exports from the United States from November 2024 to January 2025, up 0.9 percentage points over the same period one year ago.
• California ports accounted for 20.1% of all imports to the United States from November 2024 to January 2025, up 0.5 percentage points over the same period one year ago.
• Container counts at the Port of Long Beach grew 30.6% from January 2024 to January 2025.
• Container counts at the Port of Los Angeles grew 15.3% from January 2024 to January 2025.

THE OUTLOOK

Beacon Economics is not at all sanguine about the near-term prospects for growth in U.S. merchandise exports, although we do believe that California industry is better positioned to cope with the latest tariffs, counter-tariffs, tariff exemptions, tariff pauses, and unilaterally suspended tariffs. Like everyone else, we have no idea what trade policies the White House might eventually pursue for a period longer than one day. (As we drafted this Outlook, the news arrived that President Trump has decided to pause the tariffs he had just announced on imports from Mexico. Canada, however, remains Mr. Trump’s Least-Favored Nation.) EDITOR’S UPDATE: After this report was written, President Trump decided to also pause the tariffs he had announced on Canadian imports. 

The highly provisional nature of President Trump’s tariffs obviously makes economic forecasting, not to mention the more serious business of corporate planning, profoundly challenging. In our California Trade Report Outlook following the November election, we wrote that we looked forward to seeing concrete policy proposals emerge to replace Mr. Trump’s often incendiary campaign rhetoric about foreign trade. We expected that the appointment of a Commerce Secretary, a Treasury Secretary, and a U.S. Trade Representative would result in a coherent statement of the administration’s intentions with respect to foreign trade. Nearly seven weeks into this presidency, we still await a greater measure of consistency in the application of whatever trade policy has evolved.

This week’s sharp increases in tariffs on goods imported from America’s three top trading partners – Mexico, Canada, and China — are predictably eliciting retaliatory responses from those nations. (California wines as well as Kentucky bourbon are no longer on liquor store shelves in Canada.) Similarly daunting levies on European goods will certainly engender similar reactions once they are imposed in the next few weeks or days as the Trump administration sharpens its policy differences with the European Union. Exports to Russia may pick up now that the White House is moving to align itself more with the Kremlin, but Russia has never accounted for more than one percent of U.S. exports in this century.

In 2024, Mexico, Canada, and China collectively account for 36.5% of California’s overall merchandise export trade, 35.2% of its agricultural exports, and 30.5% of its exports of computer and electronic products.

If President Trump persists, the imposition of 25% levies on imports from Mexico and Canada will severely disrupt, if not completely unravel, North America’s intricately interwoven manufacturing segment. California’s exports to Canada cover a broad range of consumer products and industrial commodities. However, the state’s exports to Mexico are primarily intermediate goods destined for manufacturing or assembly facilities in Mexico.

As it did following the tariffs President Trump imposed on washing machines and solar panels in 2018, China has responded with import restrictions on goods largely produced in Republican congressional districts under the assumption that representatives from those districts would have greater leverage in influencing the president’s trade policy. Even though California is notoriously a blue state, growers in the state’s Central Valley enthusiastically supported Trump’s candidacy then (and more recently in 2024). As a result, according to a study by the University of California’s Giannini Foundation of Agricultural Economics, California growers paid a significant cost when China retaliated with import tariffs that target U.S. agriculture. These retaliatory tariffs reduced U.S. agricultural exports to China by close to $14.4 billion per year, eliminating China as the number one export market for U.S. agriculture. China imposed retaliatory tariffs on a collection of California agricultural products, including fruits, nuts, and wine. Although shipments of almonds and pistachios to China did not decline, “the trade war diminished California exports of walnuts, wine, oranges, and table grapes.”

The report further noted that the U.S. government wound up spending $28 billion to compensate farmers harmed by the trade war. In some cases, farmers came out ahead in the short-run after receiving government subsidies, but in the long-run, the trade war damaged U.S. agriculture as China pivoted toward other suppliers.

This time around, China has struck back by targeting specific companies. At least two California businesses have been singled out by Beijing, the San Diego biotech firm Illumina and the San Mateo drone manufacturer Skydio.

Canada is retaliating by imposing 25% tariffs on a range of goods. A review of the commodities being sanctioned by Ottawa shows that the high-tech California products shipped across America’s northern border seem to have escaped new tariffs. However, that was not the case for wines. Last year, California wineries shipped $353 million of their product to Canada.

California farmers are otherwise much less vulnerable to any new tariffs Mexico might impose. For example, the top California farm export to Mexico last year was fresh grapes ($149,582,443), much less than the $188,046,912 worth of sunglasses California shipped south of the border in 2024. In general, the state’s exports to Mexico have involved intermediate goods.