California has only reached Japan in size, placing the US state behind the United States, China, and Germany on the list of the largest economies on the planet.
That information came from the International Monetary Fund and the US Bureau of Economic Analysis on Friday, which showed that in 2024, California reached a GDP of $ 4.10 trillion, while Japan was sitting at $ 4.01 trillion. That put California in the number of four worldwide.
Gavin Newsom, governor of California, announced the numbers with a straightforward statements. “California is not just the world, we set a pace,” Gavin said.
Trump's tariffs put in the California economy
Gavin also called Donald Trump's trade policies. He said the development made by California was “threatened by the reckless tariff policies of the current federal administration.” He too added, “The California economy forces the country, and it should be protected.”
The Trump administration has slapped 10% tariffs on almost every country sending goods to the US, with a 90-day delay in further increases. They then hit Mexico and Canada with a 25% tariff. The main blow has landed in China, which has been able to a full trade war between the first and second largest economies in the world.
To date, Chinese imports in the US are taxing up to 145%, and China responded by hitting US goods with 125% tariffs. That is not even the end. Trump's administration said the whole whole in some Chinese products could hit 245%, once new charges stacked on top of the old ones.
Gavin filed a lawsuit earlier this month to hinder the president's power to dispose of these tariffs, saying that California is running American's largest ports, tech, farm, and factories companies. Trump's tariffs are a mess in the global trade, and that hit California more difficult than anyone else.
Japan stumbled as California climbed
Japan did not fall because of bad luck. It faces long -term problems. The population is backwards, people get older, and workers become smaller. At the same time, the cost of taking care of all retirees continues to climb. That's the killing of Japan's momentum.
Earlier this week, the IMF lowered the Japanese economy forecast. It said the central bank of Japan would not increase interest rates as quickly as expected, as the country was under pressure. An economic perspective in the IMF world says that higher tariffs from April 2 (and the confusion around them) eats up to what Japan's gains are hoping from wage increase and better consumer spending.
“The impact of tariffs announced on April 2 and associated uncertainty has destroyed the expected strengthening of private consumption with increased wages in the upper income strengthening of the household,” the report said.
California, on the other hand, is stacked. It has the largest part of US agriculture and manufacturing, it captures the Silicon Valley, Hollywood, and controls the two largest seaports in the country. All of that adds serious action to the global economy.
But even with all those powers, Gavin warned that Trump's trade movements were at risk throughout California's economic engine. However, Trump said tariffs were needed. He claimed that the US had not been taxed in other countries for years and now he is “leveling the field of gaming.”
The interest rate that Trump pushed was intended to make borrowing cheaper and pulling the US factories and jobs but Gavin did not buy it. He is more focused on it and now: rising costs, slowing trade, and economic threats stacked on the west coast.
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