Trump's tariff policy may reduce California's tax revenue by $16 billion.

California Governor Gavin Newsom's finance department stated in a memo that President Trump's tariff policy is expected to decrease California's tax revenue by $16 billion in the next fiscal year. According to documents provided by the governor's office on Tuesday, the stock market experienced a significant drop last month after Trump announced comprehensive reciprocal tariffs on April 2, which is a major reason for California's tax revenue falling 4% compared to previous expectations. The expected losses include a reduction of $10 billion in capital gains, a decrease of $2.5 billion in corporate profits, and a decrease of approximately $3.5 billion in personal income tax revenue. The California finance department stated that Trump's tariff policy has weakened the economic prospects of the United States and California, leading to the stock market decline. Newsom referred to the expected revenue decrease as the "Trump recession".