California Overtakes Japan as World’s Fourth Largest Economy in 2024

By Evans Momodu, updated 16:42

California has surpassed Japan to become the world’s fourth-largest economy, driven by strong tech and trade. But new tariffs from Donald Trump could threaten that growth.

California has officially overtaken Japan to become the fourth-largest economy in the world, marking a historic economic milestone for the state. Governor Gavin Newsom announced it on Wednesday, while also raising concerns about how President Donald Trump's new tariff policies could threaten California’s economic momentum.

According to preliminary data from the U.S. Bureau of Economic Analysis, California’s nominal GDP reached $4.1 trillion in 2024, surpassing Japan’s $4.02 trillion GDP as reported by the International Monetary Fund (IMF). This places California behind only the United States, China, and Germany in global economic rankings.

“California isn’t just keeping pace with the world — we’re setting the pace,” Newsom said in a statement. “Our economy thrives because we invest in people, lead on sustainability, and believe in innovation.”

Home to nearly 40 million residents, California accounted for 14% of the U.S. GDP in 2024, with major contributions from Silicon Valley, the finance sector, and real estate. The state also engaged in $675 billion in two-way trade last year, with Mexico, Canada, and China being its top trading partners.

However, Newsom warned that the state's position as an innovation hub is at risk due to what he called the “reckless tariff policies” of Trump’s administration.

Last week, Newsom filed a federal lawsuit against Trump, challenging his use of emergency powers to impose sweeping global tariffs. The complaint argues that Trump overstepped his authority under the International Emergency Economic Powers Act (IEEPA) by enacting a 10% baseline tariff on global imports and additional tariffs on key trade partners including China, Canada, and Mexico.

“These tariffs are causing immediate and irreparable harm to California — the nation’s top economy, manufacturing base, and agriculture state,” Newsom stated.

The lawsuit claims the tariffs have disrupted supply chains, driven up prices, and inflicted billions in economic damage across multiple sectors in the state.

Twelve other U.S. states joined California in the legal battle, calling the tariffs “illegally imposed tax hikes” on American families and businesses. The White House dismissed the lawsuit as a 'witch hunt.'
Source: CNN 
Image: Reddit