California Surpasses Japan: Now the Fourth Largest Economy Globally

In a historic economic breakthrough, California's gross domestic product (GDP) rises to $4.10 trillion, surpassing Japan's GDP of $4.01 trillion, as Governor Gavin Newsom warns of potential threats from federal tariff policies.

California has officially surpassed Japan to become the fourth largest economy globally, according to data released by the International Monetary Fund (IMF) and the US Bureau of Economic Analysis. This announcement, made public by Governor Gavin Newsom, highlights California's GDP reaching $4.10 trillion in 2024, positioning it behind only Germany, China, and the US as a whole. "California isn't just keeping pace with the world - we're setting the pace," Newsom declared, emphasizing the state's remarkable economic growth.

The announcement arrives amid Newsom's criticisms directed at President Donald Trump regarding his administration's tariffs, which have raised concerns about the future trajectory of California’s economy. As the state's economy remains grounded in its vast manufacturing and agricultural sectors, it also leads in technological innovation and is home to Hollywood, the world's entertainment capital, complemented by its two major seaports.

In response to the tariff policies that have left a mark on global trade, Newsom stated, "While we celebrate this success, we recognise that our progress is threatened by the reckless tariff policies of the current federal administration." He has initiated a lawsuit challenging Trump’s authority over the staggering import taxes that are causing disruptions across various markets.

President Trump has defended his trade decisions as necessary measures to restore balance after years of perceived inequities, asserting that these tariffs will bring jobs back to the US. He has implemented various tariff rates, including a significant 25% tax on imports from Mexico and Canada and steep levies on Chinese goods, which have triggered ongoing trade tensions.

Recent reports show California's economic growth is buoyed by its rapid advancements, particularly in contrast to Japan, whose economy is grappling with challenges related to a shrinking and ageing population, coupled with rising social care costs. The IMF has responded by revising its growth forecast for Japan, while California's future prospects remain resilient as it continues to dominate its sectors.