Tensions between President Trump and California Governor Gavin Newsom escalated at the World Economic Forum in Switzerland, where Trump criticized Newsom’s leadership while Newsom urged world leaders to resist Trump’s policies.

Trump suggested California could benefit from federal intervention, claiming his administration has helped Los Angeles and hinting that the state could face investigation for alleged fraud.

Newsom mocked Trump’s remarks on social media and downplayed the comments as “boring” and “insignificant” in a CNN interview.

The Trump administration, via Treasury Secretary Scott Bessent, confirmed a probe into California amid allegations of mismanaged homelessness funds and fraudulent federal student aid claims, KOMO News has reported.

Newsom’s office has said the funds are accounted for and investigations are ongoing to determine any actual fraud.