California overtakes Japan as fourth largest global economy
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California’s economy surpasses Japan, becoming the fourth largest globally, as Governor Gavin Newsom sues Trump over tariff policies impacting the Golden State.
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California Gov. Gavin Newsom discusses President Donald Trump's tariffs during a press conference on Wednesday, April 16, 2025, in Ceres, California. (AP)
California’s economy has surpassed Japan’s, elevating the Golden State to fourth place globally, Governor Gavin Newsom announced on Thursday, marking a major milestone in its economic trajectory.
With a nominal GDP of $4.1 trillion, based on figures from the International Monetary Fund and the US Bureau of Economic Analysis, California has moved ahead of Japan’s $4.02 trillion economy. The state now trails only the US at $29.18 trillion, China at $18.74 trillion, and Germany at $4.65 trillion in global economic rankings.
Home to nearly 40 million residents, California leads the US in manufacturing and agriculture, while also standing out as a global hub for technology and entertainment industries.
"California isn’t just keeping pace with the world – we’re setting the pace. Our economy is thriving because we invest in people, prioritize sustainability, and believe in the power of innovation," Newsom said, warning that Trump’s policies threaten the state’s prosperity.
In 2024, California posted a 6% growth rate, outpacing the US at 5.3%, China at 2.6%, and Germany at 2.9%. This further reinforced the state’s position, six years after overtaking the United Kingdom to become the world’s fifth-largest economy.
“And, while we celebrate this success, we recognize that our progress is threatened by the reckless tariff policies of the current federal administration. California’s economy powers the nation, and it must be protected," the governor added.
California files lawsuit over Trump's tariff policies
California recently became the first state to file a legal challenge against the federal government over President Donald Trump’s tariff policies, claiming the measures violate constitutional limits and disproportionately harm the state’s economy.
On April 16, Newsom announced that his administration filed a lawsuit in the US District Court for the Northern District of California, contesting Trump’s use of the International Emergency Economic Powers Act (IEEPA) to impose tariffs as high as 145 percent.
Newsom argues that invoking emergency powers to implement wide-ranging tariffs exceeds the legal authority granted to the executive branch and infringes upon Congress’s exclusive role in setting trade policies.
“As one of the most trade-reliant states in the US, California is disproportionately affected by this kind of policy instability,” a spokesperson from Newsom’s office stated.
“President Trump’s unlawful tariffs are wreaking chaos on California families, businesses, and our economy, driving up prices and threatening jobs,” Newsom emphasized. “We’re standing up for American families who can’t afford to let the chaos continue.”
