California has overtaken Japan to become the fourth-largest economy in the world, placing the Golden State behind only the U.S., China and Germany.
Preliminary data from the U.S. Bureau of Economic Analysis suggests that the state’s nominal gross domestic product reached $4.1 trillion last year, approximately 14 percent of the U.S.’s GDP.
The estimate means that California, the U.S.’s most prosperous and populous state, inched past Japan in the economic rankings, with the Northeast Asian nation recording a $4.02 trillion nominal GDP in 2024, per estimates from the International Monetary Fund.
“We were just named the fourth largest economy in the WORLD – outpacing Japan,” Governor Gavin Newsom wrote on X Thursday. “Our growth rate last year outpaced the U.S., China, and Germany. Our state population is increasing. We’re #1 for new business starts, access to venture capital funding, manufacturing, and agriculture.”
“California isn’t just keeping pace with the world,” he concluded. “We’re setting the pace.”
In an interview with the Meidastouch Network on Thursday, Newsom, a Democrat, attempted to push back against the GOP narrative that Democratic states are less prosperous.
“It is a mythology that somehow red states are dominating and blue states are struggling,” he said. “It’s factually untrue.”
California’s Silicon Valley and San Francisco Bay Area are widely regarded as the global hub for technology and innovation, home to the likes of Apple and Alphabet, Google’s parent company.
The state also boasts the largest share of manufacturing and agricultural production in the U.S., the country’s two largest seaports and is the center of the world’s film and entertainment industry.
California’s GDP is only behind the U.S. at $29.2 trillion, China at $18.7 trillion and Germany at $4.7 trillion, the new data shows. California was the fastest-growing out of the four economies last year.
In a statement issued Wednesday, Newsom also took a swipe at President Donald Trump’s transnational trade war, stating that “the reckless tariff policies of the current federal administration” threaten California’s economic prowess.
“California’s economy powers the nation, and it must be protected,” he added.
It follows Newsom and California Attorney General Rob Bonta filing a lawsuit on behalf of the state last week against Trump and his “reckless and unprecedented” tariff plan.
The suit argues that as a “global leader in trade,” California will bear “an inordinate share” of the costs that result from the sweeping levies.
Earlier this month, the president enacted sweeping 10 percent levies on most countries importing goods into the U.S. after announcing a 90-day pause on higher reciprocal tariffs for what he called the “worst offenders.”
Trump imposed a 145 percent tariff on Chinese goods, with China retaliating with 125 percent import taxes on American goods.
U.S. neighbors Mexico and Canada are subject to 25 percent tariffs after the Trump administration said it wanted the countries to do more to curb the flow of illegal migrants and drugs across the border.
