Davos 2026: California Governor Newsom rebuts US President Donald Trump, calls tariffs 'regressive tax'

California Governor Gavin Newsom sharply criticised US President Donald Trump’s economic policies at the World Economic Forum (WEF) on Thursday, calling them misleading and warning they were hurting growth, jobs, and everyday livelihoods.

Speaking to Semafor’s Ben Smith, Newsom disputed Trump’s narrative on the US economy. Highlighting private-sector performance, he said, “Looking at companies like McKenzie, Microsoft, and a few Californian companies, what the hell are you talking about?”

Addressing the international audience, he added, “For those who are not American, to let you know what's happening across my country, that’s what’s happening in the USA.”

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Tariffs and job numbers under fire

Newsom criticised Trump’s reliance on tariffs, calling them a “regressive tax”. He also blamed mass deportation policies for disrupting supply chains. Citing employment trends, he said, “Worst job numbers in years in the first year of the Trump administration—49,000 jobs a month. In Biden’s administration, it was averaging 168,000 jobs a month.” He also dismissed claims of easing inflation, adding, “Inflation is not lowering, still at 2.7 percent in the USA. Everything you heard yesterday was BS.”

Impact on businesses and workers

The governor warned that tariff-driven measures were affecting ranchers, farmers, and small business owners. On tax cuts, he said, “Tax cuts are away from the rich and wealthy, the burden is on small businesses and working folks. That policy is being described as America’s economic strategy.”

Summing up his criticism, Newsom said, “It’s a failed strategy, it’s a strategy that is impacting all of the USA, including my state, California, which has been disproportionately affected. I’m against these strategies.”

Also Read: Trump @ Davos 2026: POTUS doubles down on Greenland, says Europe ‘heading in wrong direction’

Trump steps back on Greenland tariffs

Separately at Davos, Trump stepped back from threats to impose tariffs as leverage over Greenland. He ruled out the use of force and suggested a potential deal to resolve the dispute over the Danish territory, which could have strained NATO relations.

Trump indicated that the US is on track to collect $600 billion in tariff revenue, claiming it would rise further next year. After talks with NATO Secretary General Mark Rutte, he said the allies could reach a deal over Greenland that balances security, mineral access, and blocks Chinese and Russian ambitions. “It’s a deal that everybody’s very happy with… It’s a long-term deal. It’s the ultimate long-term deal,” Trump said.

Rutte confirmed the question of Greenland’s political status with Denmark did not come up in discussions, noting Trump’s focus was on protecting the Arctic region.