States of Resistance

Over at Talking Points Memo, Josh Marshall has been making the case that the states are critical sites of resistance to Trump’s lawless power grabs on the road to authoritarianism. He was challenged today by a reader who asked him what, specifically, the Blue states can do. Marshall tossed out some ideas: Secure the vote, sure. But we should already expect this, and it’s still a very defensive move, not chipping away at Trump’s expanding power. Withholding taxes collected from state employees from the Federal Government. I am not keen on this, as it is probably illegal. And why wouldn’t Trump retaliate by stopping all Federal payments to California? Arresting masked and out-of-uniform ICE agents who refuse to identify themselves. Maybe, but this could get dangerous very fast.

Strategizing like this is not really my thing. But I have an idea. And I think it could be significant. Over at Vox, Dylan Matthews argues that Trump’s 15% tax on Nvidia’s and AMD’s chip exports to China is flagrantly unconstitutional. It’s not just that Trump lacks any authority from Congress to impose this tax. It’s that Article I, Section 9, Clause 5 of the U.S. Constitution says, “No Tax or Duty shall be laid on Articles exported from any State.” Trump is imposing a duty on a major export from the State of California. This looks like an open-and-shut case, easy to understand.

The difficulty is that Nvidia and AMD have caved on this, because Trump has so many other ways to get back at tech companies if he wants. He could, after all, simply prohibit chip exports to China, which would be perfectly legal. So this is extortion. Nvidia and AMD, although they have legal standing to object to Trump’s illegal tax, and would likely win their case if they filed one, would lose financially from Trump’s retaliation if they filed.

So here’s my idea: Governor Newsom and Attorney General Rob Bonta should sue the Trump administration to stop the 15% export tax on Nvidia’s and AMD’s chip exports to China. I know, I know, neither China nor the big tech companies are popular. But hear me out.

California has its own standing in this case, since Trump is unconstitutionally attacking one of the foundations of California’s–and America’s–prosperity. And the export clause clearly recognizes the stakes that the States have in protecting their own economies.

How then, to turn this against Trump, rather than look like it’s merely a move in support of China and cutting taxes on the tech billionaires?

1. Trump can’t credibly argue that he’s punishing China with this tax. He’s punishing California and American businesses. If Chinese access to the chips were truly a national security concern, which is his pretext for meddling with chip exports at all, then he should ban the exports outright. Now that he’s willing to permit the exports, he is in no position to credibly claim that exporting the chips undermines U.S. national security. (Matthews helpfully shows how uncertain the national security case is in any event.)

2. Trump is vulnerable on the trade question. Here he is attacking a U.S. export to China, and he claims he wants to reverse our trade deficit with China? He is making it worse, even when the China rivalry is his signature trade issue. Of course, banning the chip exports altogether would worsen the trade deficit with China even more. But that’s his political bind to deal with, not California’s.

3. If Trump can attack one state’s exports with this move, he can attack any state’s exports that way. The Blue states at least have every incentive to line up behind California. But even Red states might find themselves in trouble if there is something Trump wants and threatens an export tax to force submission of a Red state industry. He has already shown he’s willing to damage Red state economies a lot, with Medicaid cuts, elimination of IRA subsidies, other attacks on green energy, retaliatory tariffs other countries have put on U.S. agricultural exports, and more. Even if they don’t join California’s suit, I bet they will quietly hope that California files and wins. Newsom and Bonta need to highlight how California is fighting to shield all the states from Trump’s destructive and illegal action. Trump’s tax is not just lawless, it’s extortion, and Democrats are fighting this.

4. The export tax should be made part of a more general case that Trump is destroying many of our major export industries. On top of tech, his other policies are destroying agriculture, tourism, and higher education–all sources of huge foreign spending. Democrats should show that they are taking a stand against Trump’s economic destruction.

5. This is a significant act of resistance. It’s a direct attack on Trump’s extortionate abuse of Presidential power, and promises to claw some of it back. Of course, it is possible that our corrupt Supreme Court will find a way to give Trump what he wants. But that will expose how corrupt the Court really is. Democrats need to back the Supremes into a corner, too, since the Court is deeply complicit in Trump’s authoritarian moves. If the Court even grants an emergency stay on a lower court order stopping the tax, Newsom and Bonta should be yelling very loudly that the Court is corrupt. The Constitutional language is clear and straightforward. And so is the argument that strengthening U.S. exports is good for the American economy. Everyone’s eyes would glaze over from Trump or the Court’s attempts to explain how this is legally ok and good for America.

6. Newsom and Bonta could put a catchy phrase on Trump’s export tax: he is putting America last. In a head-to-head competition with China, Trump is handing China a victory in depriving U.S. tech of much-needed revenues for further investment in AI. And all because he wants to raise taxes on American business?

7. Most important from a mobilization perspective, Democrats are in a funk about what to do and voters are rightly angry at them for being feckless and weak. A move like this, taking the battle into Trump’s territory rather than defensively crouching in one’s own, could help Dems get some energy and confidence for further resistance. And this is an unusual case where a Democratic initiative can be framed equally powerfully across the ideological spectrum and across Blue and Red districts. To the left and deep Blue districts: We are stopping Trump’s authoritarian moves and clawing back the power he has grabbed. We are the resistance. To moderates: We are upholding the Constitution against a lawless power grab (and possibly a corrupt Court). We are defending the economy against Trump’s extortion. To the center-right voters and Blue districts: We have your back. We stand for a strong economy, increased exports, good jobs, and securing businesses against extortionate taxes and state bullying.

The issue at stake here is not lower taxes on business. It’s about stopping illegal, authoritarian bullying and rebuilding d(D)emocratic power and energy with action, not just words.