California Surpasses Japan as World’s 4th Largest Economy Amid Trade Policy Tensions

California’s economy has eclipsed Japan’s to claim the title of the world’s fourth-largest, with a GDP of $4.10 trillion in 2024 compared to Japan’s $4.01 trillion, according to data from the International Monetary Fund and the U.S. Bureau of Economic Analysis. Governor Gavin Newsom framed the milestone as a testament to the state’s economic vitality, declaring, "California isn’t just keeping pace with the world, we’re setting the pace."

The achievement comes amid friction with federal trade policies. Newsom singled out the Trump administration’s tariffs as a threat to California’s momentum, warning that "reckless tariff policies" jeopardize the state’s role as a national economic engine. The administration’s 10% tariffs on key imports have introduced uncertainty for industries central to California’s growth.