Sacramento (Europe Brief News): The California economy surpassed Japan to become the world’s fourth-biggest economy by gross domestic product (GDP).
Governor of California Gavin Newsom Gavin Newsom declared on Wednesday April 23, 2025 that California has attained fourth position on the world economic scale surpassing Japan according to new statistics from the International Monetary Fund (IMF) and U.S. Bureau of Economic Analysis (BEA).
According to the IMF’s World Economic Outlook 2024, California’s $4.1 trillion nominal GDP exceeds Japan ‘s $4.02 trillion placing California at rank four after the top three economies which include the United States, China, and Germany. Current California GDP statistics stem from the latest economic information provided by the BEA at the state level.
California Governor Gavin Newsom said in a statement that “California isn’t just keeping pace with the world—we’re setting the pace. Our economy is thriving because we invest in people, prioritize sustainability, and believe in the power of innovation.”
Although, during the milestone achievement celebration Newsom attacked the trade policy measures of President Trump. “And, 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.”
Governor Newsom’s office posted to its website that the economic growth of California surpasses all three global economies ranked as largest. The 6% growth pace of California exceeded the U.S. at 5.3% along with China at 2.6% and Germany at 2.9% during 2024. Over a four-year period California maintains strong economic stability because its nominal GDP expands by 7.5% annually from 2021 through 2024. According to early estimates, India is anticipated to surpass California by 2026.
How has California become the backbone of the Nation’s Economy?
According to Newsom, California serves as the nation’s economic backbone. With a growing population and record-high tourism expenditures, California leads the nation in new business formation, access to venture capital, and sectors such as manufacturing, high technology, and agriculture.
The state drives national economic development and contributes over $83 billion more to the federal government than it receives in federal funding. The United States identifies California as both its leading agricultural state and its central hub for manufacturing activity since it maintains more than 1.1 million employees within its 36,000 manufacturing businesses.
The manufacturing sector in California established new business sectors while producing aerospace products along with computers and electronics and most recently developing zero-emission vehicles.
Can California’s Legal Challenge Shield Its Economy from Federal Tariffs?
Governor Gavin Newsom took action to protect California’s economy by filing a federal court lawsuit on April 16, 2025 against President Donald Trump’s broad tariff policy that damages state economies together with consumers and businesses, which accused Trump bypassing Congress’ constitutional authority over trade policies. The suit cited Trump’s invocation of the International Economic Emergency Powers Act (IEEPA), a law granting the president broad authority to deal with foreign-born threats to national security through economic means.
Newsom said when announcing the lawsuit “No state is poised to lose more than the state of California. That’s why we’re asserting ourselves on behalf of 40 million Americans.”
The lawsuit seeks to end President Trump’s tariff chaos, which has wreaked havoc on the economy, destabilized the stock and bond markets, caused hundreds of billions of dollars in losses, and inflicted higher costs for consumers and businesses. The negative economic effects will worsen because President Trump’s protective tariffs predict an annual reduction of $100 billion from the United States economy.
A dozen more states also filed suit Wednesday with the U.S. Court of International Trade in New York City, challenging the use of the IEEPA by the president to impose tariffs. The filing names as plaintiffs in the new suit Oregon, Arizona, Colorado, Connecticut, Delaware, Illinois, Maine, Minnesota, Nevada, New Mexico, New York and Vermont
