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California’s economy has surpassed that of Japan, positioning the state as the fourth largest economic entity globally. Governor Gavin Newsom highlighted recent data from the International Monetary Fund (IMF) and the US Bureau of Economic Analysis, which indicates that California’s gross domestic product (GDP) reached $4.10 trillion in 2024, exceeding Japan’s GDP of $4.01 trillion.
The state now ranks behind only Germany, China, and the entire United States. Newsom remarked, ‘California isn’t merely keeping up with global trends; we are leading them.’ These statistics emerge as Newsom has criticized President Donald Trump’s tariffs and expressed concerns regarding the future of California’s economy. The state holds the largest share of manufacturing and agricultural output in the US and is a hub for technological advancements, the entertainment industry, and the nation’s two largest seaports. As a prominent Democrat and potential presidential candidate for 2028, Newsom has initiated legal action against Trump’s authority to impose tariffs, which have disrupted global markets and trade.
Trump has implemented a 10% tariff on nearly all countries exporting to the US, following a 90-day suspension of increased tariffs. Additionally, a 25% tariff has been levied on Mexico and Canada, while tariffs on China have escalated into a trade conflict with the world’s second-largest economy.
Trump has set import taxes as high as 145% on Chinese goods entering the US, prompting China to retaliate with a 125% tax on American products. His administration recently stated that when new tariffs are combined with existing ones, some Chinese goods could face levies of up to 245%. Newsom expressed his concerns about the future of the state’s economy, stating, ‘While we celebrate this achievement, we acknowledge that our advancement is jeopardized by the reckless tariff policies of the current federal administration. California’s economy drives the nation, and it must be safeguarded.’
Trump contends that his trade war is merely rectifying the imbalance created by years of taxation on the US. The imposition of tariffs aims to incentivize the return of factories and jobs to the United States, forming a crucial component of his economic strategy, alongside a reduction in interest rates intended to lower borrowing costs for American citizens.
Recent data indicates that California’s GDP stands at $29.18 trillion, trailing behind the US, China at $18.74 trillion, and Germany at $4.65 trillion, while also highlighting California as the fastest-growing among these economies. Meanwhile, Japan’s economy faces challenges due to its declining and aging population, resulting in a shrinking workforce and escalating social care expenses.
This week, the IMF revised its economic growth forecast for Japan downward, suggesting that the central bank would increase interest rates at a slower pace than previously anticipated due to the repercussions of heightened tariffs. According to the World Economic Outlook report, ‘The impact of tariffs announced on April 2 and the accompanying uncertainty have countered the anticipated improvement in private consumption, despite wage growth outpacing inflation and enhancing household disposable income.’
