California passes Japan as fourth largest economy

California overtaking Japan to become the fourth largest economy in the world is a pretty striking milestone. Here’s a quick breakdown of what this all means and why it matters:

California’s Economic Rise

• GDP in 2024: $4.10 trillion
• Japan’s GDP: $4.01 trillion
• Global Rank: Now behind only:
  1. United States (total): $29.18 trillion
  2. China: $18.74 trillion
  3. Germany: $4.65 trillion

California now leads all other individual countries, including economic heavyweights like the UK, India, and France.

Why California’s Economy is Booming

• Tech Powerhouse: Silicon Valley continues to drive global innovation.
• Entertainment Hub: Hollywood and the wider media industry remain global forces.
• Agriculture & Manufacturing: The state has the largest share of both sectors in the US.
• Ports: LA and Long Beach are the two busiest seaports in the country.

Newsom vs. Trump: Economic Clash

• Newsom: Celebrated the economic growth, but warned that Trump’s tariffs are a serious threat.
• Trump’s Tariffs:
  • 10% on most imports
  • Up to 145% on Chinese goods
  • China retaliated with up to 125% on American products
  • Some combined tariffs now effectively reach 245% on certain items

Newsom is legally challenging Trump’s authority to impose these tariffs, arguing that they could harm California’s economy, which is deeply integrated with global trade.

🇯🇵 Japan’s Economic Struggles

• Shrinking and aging population
• Rising social welfare costs
• Slower-than-expected recovery, despite wage growth
• IMF downgraded Japan’s growth outlook, partly due to the uncertainty caused by global tariffs

California isn’t just an American economic success—it’s a global one. But its future growth could hinge on national trade policy, something Gavin Newsom is clearly keeping an eye on, especially with 2028 political ambitions potentially on the horizon.