California Overtakes Japan To Become World's Fourth-Largest Economy: Progress Threatened By 'Reckless Tariff Policies,' Says Gavin Newsom

California has surpassed Japan to become the world’s fourth-largest economy, as confirmed by Governor Gavin Newsom.

What Happened: The latest data from the International Monetary Fund (IMF) and the U.S. Bureau of Economic Analysis reveal that California’s economy has grown to a point where it now ranks fourth globally. This development was announced by Governor Newsom on Wednesday.

According to 2024 data from the IMF and BEA, California’s nominal GDP hit $4.1 trillion, surpassing Japan’s $4.02 trillion, making it the world’s fourth-largest economy after the U.S., China, and Germany.

In 2024, California’s economy grew by 6%, outpacing the growth rates of the U.S. (5.3%), China (2.6%), and Germany (2.9%).

California leads the rest of the U.S. by over $1 trillion, according to the data from the BEA. With $2.7 trillion in GDP, Texas stands second to California as a state, followed by New York at $2.3 trillion.

SEE ALSO: Charlie Munger Once Observed That A Full-Scale US-China Tariff War Was ‘Massively Stupid’: The Legendary Investor Didn’t Mind If Both Beijing And Washington Got Bruised Up In Talks Though — Here’s W

Why It Matters:  This economic milestone comes amidst a strained relationship between California and the Trump administration. In April 2025, California became the first state to legally challenge the Trump administration’s extensive tariff plans, which it claimed were causing significant market instability and straining the United States’ relationships with its trading partners and allies.

This lawsuit underscores the tension between the state and federal governments, which could potentially impact California’s economic growth trajectory.

Governor Newsom stated, “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.”

White House spokesperson Kush Desai countered Newsom’s remarks by stating that the threats to California’s economic progress include intellectual property theft, poor disaster management, and crime. “Under the Trump administration, California has the potential to reach new heights – if the state’s leadership wouldn’t stand in the way,” Desai told USA Today.

Image via Shutterstock

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.