California has officially overtaken Japan to become the fourth-largest economy in the world, Governor Gavin Newsom’s office announced, citing updated data from the International Monetary Fund (IMF) and the U.S. Bureau of Economic Analysis.
The Golden State’s nominal GDP reached $4.1 trillion in 2024, surpassing Japan’s $4.02 trillion. This places California just behind the United States, China, and Germany in the global economic hierarchy.
“California isn’t just keeping pace with the world, we’re setting the pace,” Governor Newsom remarked in a statement. “Our economy is thriving because we invest in people, prioritise sustainability, and believe in the power of innovation.”
Economic Growth and Innovation at the Core
From 2021 to 2024, California recorded an average nominal GDP growth rate of 7.5%, with a solid 6% growth in 2024 alone. The state continues to lead the U.S. in new business creation, access to venture capital, and output in manufacturing, high-tech sectors, and agriculture.
“California is the leading agricultural producer in the country and also the center for manufacturing output in the United States,” the Governor’s office stated. “With over 36,000 manufacturing firms employing 1.1 million residents, we are powering America’s future.”
Notably, California contributes more to the federal treasury than it receives, sending over $83 billion more to the federal government than it gets in return, further underscoring its economic significance.
Meanwhile, India has solidified its position as the world’s fifth-largest economy, with a nominal GDP of $4.27 trillion in 2024. The IMF projects India’s real GDP growth at 6.8% for 2024-25, driven by strong domestic demand and a rising working-age population
Lawsuit Against Trump-Era Tariffs
Despite the milestone, Governor Newsom expressed concerns over trade tensions with the federal government. On April 16, California filed a lawsuit challenging the use of emergency powers by the federal administration to impose sweeping tariffs, largely initiated during President Donald Trump’s tenure.
“These tariffs threaten California’s economy and undermine the progress we’ve made,” the Governor’s office noted.
The lawsuit aims to halt what Newsom called “tariff chaos,” which the state claims has destabilised markets and increased costs for businesses and consumers. According to a policy analysis by Trade Partnership Worldwide, California could face over $170 billion in import taxes in 2025 if the current tariff structure is upheld.
Looking Ahead
As California cements its position as an economic powerhouse, it continues to balance progress with policy challenges. The Newsom administration remains firm on defending the state’s interests amid federal trade disputes, while staying committed to its core principles of sustainability, equity, and innovation.
Also Read: Tesla Faces New Battery Rival as CATL Unveils Rapid-Charge Tech
