California has surpassed Japan to become the world’s fourth largest economy, according to new figures from the International Monetary Fund (IMF) and the US Bureau of Economic Analysis.
The data shows that California’s gross domestic product (GDP) reached $4.10 trillion in 2024, edging ahead of Japan’s $4.01 trillion. The Golden State now trails only Germany, China, and the United States as a whole in global economic rankings.
Governor Gavin Newsom celebrated the milestone, declaring, “California isn’t just keeping pace with the world – we’re setting the pace.” He emphasized the state’s economic strength even amid global uncertainties.
The state owes its rapid growth to a diversified economy, including the largest share of manufacturing and agriculture in the U.S., a world-leading tech industry, and dominance in entertainment and international trade through its two largest seaports.
Despite the achievement, Newsom voiced concern over the impact of federal trade policies under President Donald Trump. He specifically criticized the administration’s sweeping tariffs, warning they threaten California’s economic momentum.
Newsom, a leading Democrat and potential 2028 presidential contender, has filed a lawsuit challenging Trump’s authority to impose broad levies. The governor argues that the tariffs have disrupted global markets and put American industries at risk.
President Trump’s tariff strategy includes a 10% duty on most imports to the U.S., and additional 25% tariffs on goods from Mexico and Canada. His administration’s hardline approach toward China has triggered a full-blown trade war.
Tariffs on Chinese goods now reach up to 145%, while Beijing has retaliated with 125% taxes on American exports. Trump maintains that the measures are necessary to rebalance global trade and encourage domestic job creation.
California’s economy, growing faster than that of any other top-four nation, remains vulnerable to such global tensions. While we celebrate this success, we recognise that our progress is threatened by the reckless tariff policies of the current federal administration,” Newsom warned.
Meanwhile, Japan’s economy continues to struggle under the weight of a shrinking, aging population and rising social care costs. The IMF recently downgraded its growth forecast for Japan, citing the combined drag of tariffs and slower than expected interest rate adjustments.
California’s rise to the fourth spot is not only symbolic of its global clout but also a reflection of how subnational entities are increasingly shaping international economic trends. The question now is how long it can hold that position amid rising global uncertainties.
