California’s economy surpasses Japan’s to become the fourth largest in the world

With a GDP of $4.10 trillion, California has formally surpassed Japan to occupy the fourth-largest spot globally.

According to fresh data issued by the US Bureau of Economic Analysis and the International Monetary Fund (IMF), California has officially overtaken Japan to take the fourth-largest economic position in the world.

The US state today trails only the US, China, and Germany in terms of GDP, with a 2024 GDP of $4.10 trillion (£3.08 trillion). With a $4.01 trillion GDP, Japan, which was formerly the second-largest economy in the world, is now in fifth place.

Governor Gavin Newsom celebrated the milestone by saying, “California isn’t just keeping pace with the world — we’re setting the pace.”

Due to its unique combination of manufacturing, agriculture, technical innovation, and cultural impact, California continues to dominate the world economy, as evidenced by these numbers. The state is also the center of the world’s entertainment sector and is home to the two biggest seaports in the country.

But the economic victory comes as Governor Newsom’s worries about the effects of federal trade policy are mounting. The Democratic leader, who is largely regarded as a possible presidential candidate in 2028, has criticized US President Donald Trump’s broad tariffs on imports from around the world, stating that they could slow California’s economic growth.

“We acknowledge that the current federal administration’s reckless tariff policies threaten our progress, even as we celebrate this success,” Newsom stated. “The economy of California is the backbone of the country and needs to be safeguarded.”

Trump claims the actions are required to restore justice to international trade and encourage home production. He has imposed further tariffs of up to 145% on goods from China and 10% levies on the majority of imports from other countries. The trade battle between the two biggest economies in the world has gotten more intense as a result of China’s retaliatory tariffs, which can reach 125% on American exports.

In court, Newsom has contested the legitimacy of these taxes, arguing that they are burdening his state’s businesses excessively and interfering with international trade.

California’s economy is not only bigger than Japan’s, but it is also expanding more quickly than any other top economy, according to the IMF’s most recent World Economic Outlook. On the other hand, Japan’s economy has suffered due to a fast aging population, a declining labor force, and rising social care expenses.

This week, the IMF lowered its growth prediction for Japan and issued a warning that the nation’s economic recovery was being hampered by increased tariffs. The report stated that “the anticipated strengthening of private consumption was offset by the effect of tariffs announced on April 2 and associated uncertainty.”

California is still thriving as a representation of American ingenuity and tenacity, but its leaders warn that this progress is not impervious to the repercussions of international trade battles.