California’s merchandise export trade was nominally valued at $16.109 billion in July (the latest available data), according to Beacon Economics’ analysis of new statistics released this morning by the U.S. Census Bureau’s Foreign Trade Division. That represented a nominal 1.1% gain over the $15.932 billion in exports the state shipped in the July 2025.

Over the same period, however, overall U.S. exports grew by 12.8% to $197.454 billion from $175.111 billion one year earlier. As a result, California’s share of the nation’s merchandise export trade fell to 8.2% from 9.1%. Exports of California’s manufactured products dipped by 1.3% to $9.855 billion, falling from $9.987 billion in July 2025. Meanwhile, the state’s shipments abroad of non-manufactured commodities jumped by 16.4% to $2.274 billion from $1.953 billion. Re-exports slipped by 0.3% to $3.980 billion, declining from $3.992 billion in July 2025.

Through the first seven months of this year, California has shipped merchandise valued at $112.450 billion abroad, a nominal 2.7% gain over the $109.496 billion shipped during the same period in 2025.

“We caution that these are nominal figures. The real value of California’s merchandise export in July trade was down 6.6% from a year earlier,” said Jock O’Connell, Beacon Economics’ International Trade Advisor. “With a stumble in July exports from the transportation and computer and electronic industries, shipments abroad from California’s agricultural sector and its chemical industries rescued the state from a sharper decline in exports.”

In the latest quarter, California’s merchandise export trade with the economies of East Asia edged up by 0.9% as the value of shipments across the Pacific totaled $16.720 billion, up from $16.576 billion one year earlier. Meanwhile, California’s exports to the European Union and the United Kingdom gained by 7.3%, rising to $9.853 billion from $9.180 billion. The state’s exports to Latin America and the Caribbean (excluding Mexico) were up by 3.3% to $2.280 billion from $2.207 billion.

Shipments to the member states of the Gulf Cooperation Council (Saudi Arabia, United Arab Emirates, Qatar, Oman, Bahrain, and Kuwait) plunged by 26.9% to $720 million from $985 million one year earlier. California exports to Sub-Saharan Africa remained negligible, rising by 2.5% to $157 million from $154 million.

Over half (52.5%) of California’s $49.242 billion merchandise export trade in the latest three months was shipped by air, while waterborne transport carried 23.6% of the state’s export trade. The balance of the state’s exports largely travelled overland to Canada and Mexico. (Containerized shipments by sea accounted for just 17.7% of the total value of California’s merchandise export trade over the past three months.)

Guardedly pessimistic is probably the outlook of nearly all trade analysts. And why not? The Iran-U.S. confrontation in the Persian Gulf is its seventh month amid reports that the Arsenal of Democracy has been severely depleted, potentially leaving America and its allies – most notably Ukraine and Taiwan – gravely imperiled.

Energy costs are persistently high for all businesses and consumers. For those responsible for the physical movement of internationally traded goods, truckers servicing the Southern California Ports of Long Beach and Los Angeles this week face diesel fuel prices averaging $7.66, $2.51 higher than they were one year ago. The bunker fuel that powers oceangoing vessels costs shipping lines 59.5% more today than on September 3, 2025.

At the recently concluded G20 talks in North Carolina, China blocked an otherwise unanimous communique, while American and European delegates sniped at each other. America’s gross national debt has now exceeded $40 trillion, while the Trump administration is asking Congress for another $1.5 trillion to finance the Defense Department. Unprecedented heat waves have afflicted broad swaths of the planet, leading to elevated human-misery indices as well as suppressed economic activity. An oil venture in Venezuela has the potential of becoming the Teapot Dome scandal of the Trump administration.

And trade talks between Washington and Ottawa have collapsed amidst acrimonious and occasionally childish language from the White House. The U.S. position would have left Canada as a vassal state, unable to conduct its own foreign and trade strategies.

Canada is California’s second largest export market, but the value of California’s shipments to Canada has been declining. Last year, $17.005 billion in California products were shipped north of the border, down 13.0% as Canadians reacted poorly to President Trump’s insistence on belittling our neighbor. The recent imposition of a new set of tariffs on Canadian goods entering the U.S. has predictably resulted in retaliatory tariffs Ottawa has levied against selected American exports to Canada.

There is some confusion in the media about which California goods are likely to be affected by the latest Canadian tariffs. An August 26 Sacramento Bee article carried the headline “California dairy hit by new Canadian tariffs” without noting that the dairy industry has lately accounted for half of one percent of California’s exports to Canada.

As California Manufacturers and Technology Association CEO Lance Hastings remarked, “California manufacturers operate in a just-in-time global marketplace, and rapid shifts in trade policy add cost and uncertainty for companies with cross-border supply chains. California manufacturers are caught in the crossfire, when what we seek is more economic stability.”