Sacramento, California – The economic powerhouse of California has surpassed Japan to become the fourth-largest global economy, according to recent data from the International Monetary Fund (IMF) and the US Bureau of Economic Analysis. California’s gross domestic product (GDP) reached $4.10 trillion in 2024, exceeding Japan’s $4.01 trillion. Governor Gavin Newsom highlighted the state’s impressive growth, positioning California just behind Germany, China, and the United States as a whole.
Newsom emphasized California’s leading role in the world economy, boasting the state’s prominence in manufacturing, agriculture, technology, entertainment, and trade. Despite its economic success, Newsom expressed concerns about the impact of President Donald Trump’s tariffs on the state’s economy. Newsom, a prominent Democrat and potential presidential candidate, has taken legal action against the administration’s tariff policies, which have sparked disruptions in global markets and trade.
Trump’s tariffs have ignited trade tensions, particularly with China, resulting in retaliatory measures and escalating import taxes on goods from both countries. Newsom warned that California’s progress could be hampered by the uncertainty created by the current administration’s tariff strategies, stressing the importance of protecting the state’s economy.
Addressing Trump’s rationale for the trade war, Newsom raised doubts about the effectiveness of the tariffs in achieving their intended goals of revitalizing American manufacturing and job creation. While California’s GDP growth has outpaced Japan, China, and Germany, concerns linger about the impact of the trade war on the global economy.
The IMF’s recent economic growth forecast for Japan reflects the challenges posed by an ageing population and escalating social care costs. The central bank’s cautious approach to interest rate adjustments is a response to the uncertainties arising from higher tariffs imposed by various countries. Japan’s economic outlook remains uncertain in the face of these challenges, prompting a reevaluation of growth projections.
Amidst the evolving global economic landscape, California’s ascension to the rank of the fourth-largest economy underscores the state’s economic significance on the world stage. As trade tensions persist and economic uncertainties loom, Newsom’s advocacy for safeguarding California’s economy serves as a reminder of the interconnectedness of global economies and the importance of strategic economic policies.