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California has overtaken Japan in terms of its Gross Domestic Product (GDP) — a milestone highlighted by Governor Gavin Newsom, who warned that President Donald Trump’s tariff policies could endanger the state’s growing prosperity.
According to preliminary figures from the US Bureau of Economic Analysis, California posted a nominal gross domestic product (GDP) of $4.1 trillion in 2024. This is higher than Japan’s $4.02 trillion GDP for the same period, as reported by the International Monetary Fund.
This places California just behind the United States, China and Germany in total economic output, with the state’s economy growing by 6 per cent in 2024 — outpacing all three of those nations.
“California isn’t just keeping pace with the world — we’re setting the pace,” Newsom said in a statement Wednesday according to CNN. “Our economy is thriving because we invest in people, prioritise sustainability, and believe in the power of innovation.”
However, Newsom cautioned that the state’s economic progress is under threat from what he called “the reckless tariff policies of the current federal administration.”
“California’s economy powers the nation, and it must be protected,” he added.
Also read: Donald Trump tariffs to hit global economy hard! IMF cuts India’s GDP growth forecast to 6.2% for 2025; says it’s relatively more stable
With a population nearing 40 million, California contributed 14 per cent of the United States’ total GDP in 2024, led by its dominant technology industry, booming property market, and strong financial sector.
Newsom on April 16 filed a federal lawsuit against Trump, challenging his use of emergency powers to impose sweeping global tariffs. The suit argues that these measures are inflicting economic harm on California’s businesses and residents.
The legal filing contests Trump’s authority to enact tariffs on key trading partners — Mexico, China and Canada — under the International Emergency Economic Powers Act (IEEPA), citing a 10 per cent blanket tariff on all imports. Newsom’s team argues the move is “unlawful and unprecedented” without congressional approval.
Enacted in 1977, the IEEPA grants presidents broad powers to implement economic sanctions during national emergencies, but requires consultation with Congress.
California recorded $675 billion in two-way trade in 2024, with Mexico, Canada and China serving as its primary trading partners. These three countries alone accounted for over 40 per cent of the state’s imports — $203 billion of the $491 billion total.
Twelve other states joined California in filing lawsuits on Wednesday, accusing the Trump administration of implementing tariffs that amount to illegal tax hikes. The White House dismissed the coordinated legal challenge as a “witch hunt.”
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