California has now overtaken Japan to become the fourth-largest economy in the world, with a GDP of $4.10 trillion in 2024, according to recent data from the International Monetary Fund (IMF) and the US Bureau of Economic Analysis. The state now ranks behind only the United States, China, and Germany, while Japan, which was once the second-largest economy, has fallen to fifth with a GDP of $4.01 trillion.

Governor Gavin Newsom hailed the achievement, saying, “California isn’t just keeping up with the world — we’re setting the pace.” This accomplishment highlights California's continued role as a global economic leader, driven by its diverse industries such as technology, manufacturing, agriculture, and entertainment. The state also houses the two largest seaports in the United States and remains the hub of the global entertainment industry.

Despite this success, Newsom has expressed concerns about how federal trade policies could impact California’s economic growth. He has criticized former President Trump's tariffs on global imports, warning that they could slow down the state's progress. "While we celebrate this success, we recognize that our progress is threatened by the reckless tariff policies of the current federal administration,” Newsom remarked. “California’s economy powers the nation, and it must be protected.”

Trump’s administration has imposed tariffs on imports, including steep levies on Chinese goods, intensifying the trade war between the US and China. Newsom has challenged these tariffs in court, claiming they disrupt global trade and harm businesses in California.

The IMF’s latest World Economic Outlook shows that California’s economy not only exceeds Japan’s but is also growing at a faster rate than other leading economies. On the other hand, Japan faces ongoing economic struggles due to an aging population, a shrinking workforce, and rising social care costs. The IMF has downgraded Japan’s growth forecast, noting that the new tariffs have slowed the country’s economic recovery.

While California continues to thrive as a symbol of innovation and resilience, its leaders warn that global trade disputes could affect its continued growth.