California’s economy has surpassed Japan’s economy, making the US state the fourth largest global economic force.
Governor Gavin Newsom has touted new data from the International Monetary Fund (IMF) and the U.S. Bureau of Economic Analysis showing growth in California.
The data shows that California’s GDP reached $4.10 trillion (£3.08 trillion) in 2024, surpassing Japan. The state now only overtakes Germany, China and the entire United States.
“California isn’t just in line with the world, we’re at a pace,” Newsom said.
The new guy comes when Newsom speaks up against President Donald Trump’s tariffs and raises concerns about the future of the state’s economy.
California has the largest share of manufacturing and agricultural production in the United States. It also has major technological innovation, the heart of the global entertainment industry, and two largest ports in the country.
In 2028, Newsom, a prominent Democrat and potential presidential candidate, filed a lawsuit challenging Trump’s authority to impose taxes that have caused disruption to global markets and trade.
Trump has enacted a 10% tax in almost every country that imports into the US after announcing a 90-day suspension with higher tariffs.
An additional 25% tariff was imposed on Mexico and Canada. However, taxation in China has led to an all-out trade war with the world’s second largest economy.
Trump has placed an import tax of up to 145% on Chinese products coming into the US, and China has fought back with a 125% tax on American products.
His administration said last week that taxation on some Chinese goods could reach 245% when new tariffs were added to existing tariffs.
Newsom realized his concerns about the future of the state’s economy.
“While we celebrate this success, we recognize that our progress is threatened by the current federal administration’s reckless tariff policies,” he said. “The California economy must empower and protect the nation.”
Trump argues that his trade war levelles the playing field only after years of taxation in the US.
Customs are efforts to encourage factories and jobs to return to the United States. This is one of the main pillars of his economic agenda, as well as interest rate reductions aimed at reducing American borrowing costs.
The new data shows that California’s US has a GDP behind $29.18 trillion, China is $18.74 trillion and Germany is $4.65 trillion. It also shows that California was the fastest growing of these countries.
Japan’s economy is under pressure due to population decline and aging. That means the workforce is shrinking and social care costs are rising.
This week, the IMF cut its forecast for Japan’s economic growth, predicting that the central bank will raise interest rates more slowly than previously expected due to the effects of increased tariffs.
“The uncertainty associated with the impact of tariffs announced on April 2nd offsets the strengthening of private consumption forecasts with growth in wages beyond expansion,” the Global Economic Outlook report states.
