The Golden State's economy has officially eclipsed Japan's, securing its spot as the world’s fourth-largest—but rising trade tensions and tariffs could put its dominance at risk.
California’s economy has just hit a major milestone—overtaking Japan to become the fourth-largest in the world. Fresh data from the International Monetary Fund (IMF) and the U.S. Bureau of Economic Analysis reveals that the Golden State’s GDP reached a staggering $4.10 trillion in 2024, edging past Japan’s $4.01 trillion. Now, only Germany, China, and the entire U.S. economy itself outrank California.
Governor Gavin Newsom wasted no time celebrating the achievement, declaring, “California isn’t just keeping pace with the world—we’re setting the pace.” And he’s not wrong. The state is a powerhouse, leading the nation in manufacturing, agriculture, and tech innovation. It’s also the heart of global entertainment and home to America’s two busiest seaports.
But it’s not all smooth sailing. Newsom, a rising Democratic star and potential 2028 presidential contender, has been vocal about his concerns over former President Donald Trump’s aggressive tariff policies. His administration even filed a lawsuit challenging Trump’s authority to impose these levies, which have rattled global markets.
Trump’s trade war has been fierce—slapping 10% tariffs on nearly all imports, with even steeper rates for China (up to 245% when combined with existing duties). China retaliated with its own 125% tax on American goods, escalating tensions between the world’s two largest economies.
While Trump argues these measures protect U.S. jobs and level the playing field, Newsom warns they could jeopardize California’s economic momentum. “While we celebrate this success, we recognize that our progress is threatened by reckless federal policies,” he said.
Meanwhile, Japan’s economy is feeling the squeeze. A shrinking, aging population means fewer workers and soaring healthcare costs. The IMF recently downgraded Japan’s growth forecast, predicting slower interest rate hikes due to global trade instability.
Despite the challenges, California’s economy is growing faster than any of the top-ranking nations. But with trade wars raging and uncertainty looming, the question remains: Can the Golden State maintain its dominance?
For now, it’s clear—California isn’t just competing on the global stage; it’s leading it.
