California’s economy has officially overtaken that of Japan, making the U.S. state the fourth-largest economy in the world, according to new data from the International Monetary Fund (IMF) and the U.S. Bureau of Economic Analysis.
Governor Gavin Newsom announced the milestone, highlighting that California’s gross domestic product (GDP) reached $4.10 trillion in 2024, edging past Japan’s $4.01 trillion.
The state now trails only the United States as a whole ($29.18 trillion), China ($18.74 trillion), and Germany ($4.65 trillion).
“California isn’t just keeping pace with the world—we’re setting the pace,” Newsom said in a statement.
The Golden State’s economic strength is anchored in its leadership in technology, entertainment, manufacturing, and agriculture. It also houses the two largest seaports in the U.S., serving as key gateways for global trade.
Despite the economic triumph, Newsom expressed concern over policies from the federal government—specifically, tariffs imposed by former President Donald Trump.
The governor, a prominent Democrat and potential 2028 presidential contender, has filed a lawsuit challenging Trump’s authority to levy import taxes.
Trump’s administration imposed sweeping tariffs: a 10% levy on nearly all U.S. imports, additional 25% duties on goods from Canada and Mexico, and steep tariffs on Chinese imports—some reaching as high as 145%. China retaliated with its own tariffs, with some American products facing up to 125% duties.
When combined with existing trade barriers, some levies on Chinese goods could total 245%.
Newsom warned that these protectionist measures could undercut California’s growth.
“While we celebrate this success, we recognize that our progress is threatened by the reckless tariff policies of the current federal administration,” he said. “California’s economy powers the nation, and it must be protected.”
Trump has defended his trade policies as a necessary move to bring jobs and manufacturing back to the U.S., and has also pushed for interest rate cuts to make borrowing more affordable for Americans.
Meanwhile, Japan’s economic decline has been attributed to a shrinking, aging population and increasing social care costs.
The IMF recently downgraded Japan’s economic outlook and signaled slower interest rate hikes in response to ongoing trade tensions and weak growth.
California’s surge not only solidifies its role as an economic powerhouse but also adds fuel to debates over national economic policy—and who gets to shape it next.
