California Surpasses Japan as World's Fourth-Largest Economy
Los Angeles, Thursday, 24 April 2025.
California’s nominal GDP reaches a staggering $4.1 trillion, overtaking Japan’s, fueled by innovation and entrepreneurship. Governor Newsom warns of threats posed by current U.S. tariff policies.
Surpassing Japan in Economic Rankings
California has achieved a significant economic milestone, overtaking Japan to become the world’s fourth-largest economy, as new data from the International Monetary Fund and the U.S. Bureau of Economic Analysis indicates. Governor Gavin Newsom announced this achievement in a recent statement, emphasizing that California’s nominal gross domestic product (GDP) has reached $4.1 trillion, surpassing Japan’s $4.02 trillion. This shift places California behind only the United States, China, and Germany in the global economic rankings [1].
Factors Fueling California’s Economic Growth
Several factors contribute to California’s rapid economic expansion. The state has seen significant growth driven by innovation and entrepreneurship. According to Governor Newsom, California’s commitment to sustainability, heavy investment in human capital, and a strong emphasis on the power of innovation are key drivers of its economic success. The state’s economy is also supported by a high concentration of venture capital and burgeoning new business ventures, particularly in high-tech, agricultural, and manufacturing sectors [1].
The Impact of U.S. Tariff Policies
Despite these achievements, Governor Newsom has voiced concerns about the potential threats to California’s economic progress posed by current U.S. tariff policies under President Trump. Newsom argues that these tariffs could negatively impact California, which is reliant on international trade and has a diverse economic base. He recently filed a lawsuit challenging the President’s executive authority to impose tariffs without Congressional approval. Newsom warns that such policies could damage America’s global reputation and disproportionately affect California’s economy [1].
Future Economic Projections
Looking ahead, California’s economic trajectory remains robust, although the challenges posed by federal policies and global economic trends may impact future growth rates. As noted by Governor Newsom, the state’s economy is currently experiencing a nominal GDP growth rate of 6%, the fastest among the top-four global economies. However, projections indicate that India, with its current GDP at $3.90 trillion, might overtake California as early as 2026, depending on continued economic trends [1].