California Overtakes Japan to Become World’s Fourth Largest Economy
California has officially surpassed Japan to become the fourth largest economy in the world, according to new data released by the International Monetary Fund (IMF) and the US Bureau of Economic Analysis. With a gross domestic product (GDP) of $4.10 trillion (£3.08 trillion) in 2024, the US state now ranks behind only the United States, China, and Germany. Japan, once the world’s second-largest economy, has slipped to fifth with a GDP of $4.01 trillion. “California isn’t just keeping pace with the world — we’re setting the pace,” said Governor Gavin Newsom, celebrating the milestone. The figures confirm California’s continued dominance as a global economic powerhouse, driven by its unrivalled blend of manufacturing, agriculture, technological innovation, and cultural influence. The state is also home to the two largest seaports in the United States and the heart of the global entertainment industry. However, the economic triumph arrives amid growing concern from Governor Newsom over the impact of federal trade policies. The Democrat leader, widely considered a potential 2028 presidential contender, has criticised former President Donald Trump’s sweeping tariffs on global imports, warning they could undermine California’s economic momentum. “While we celebrate this success, we recognise that our progress is threatened by the reckless tariff policies of the current federal administration,” Newsom said. “California’s economy powers the nation, and it must be protected.” Trump, who has introduced 10% levies on most international imports and additional tariffs of up to 145% on goods from China, argues the measures are necessary to restore fairness to global trade and incentivise domestic manufacturing. China has responded in kind, imposing tariffs as high as 125% on American goods, leading to an intensifying trade war between the world’s two largest economies. Newsom has challenged the legality of these levies in court, claiming they are causing disruption to global trade and putting undue strain on businesses within his state. According to the IMF’s latest World Economic Outlook, California’s economy is not only larger than Japan’s but is also growing faster than all other leading economies. In contrast, Japan’s economy has struggled under the weight of a rapidly ageing population, a shrinking workforce, and soaring social care costs. The IMF this week revised down its growth forecast for Japan and warned that higher tariffs were dampening the country’s economic recovery. “The effect of tariffs announced on April 2 and associated uncertainty offset the expected strengthening of private consumption,” the report noted. Meanwhile, California continues to thrive as a symbol of American innovation and resilience — but its leaders caution that such progress is not immune to the ripple effects of global trade disputes.
Admin | 2025-04-25 17:51:54