California, home to Hollywood and the third largest state among America's 50 states, has overtaken Japan to become the world’s fourth largest economy.
The state's nominal GDP has reached $4.1 trillion, narrowly surpassing Japan’s $4.02 trillion. Only the US, China, and Germany now rank ahead of California, with GDPs of $29.18 trillion, $18.74 trillion, and $4.65 trillion respectively.
Home to nearly 40 million people, California leads the US not only in technology and entertainment but also in manufacturing and agriculture. The state is the top agricultural producer in the US and a key hub for manufacturing output.
California Governor Gavin Newsom attributed the state's economic rise to its emphasis on investing in people, prioritising sustainability, and fostering innovation. He said the state was not merely keeping pace with the world but was in fact driving global economic momentum.
In 2024, California recorded a 6% growth rate, outpacing the US at 5.3%, Germany at 2.9%, and China at 2.6%. The new global ranking follows California’s earlier milestone in 2018, when it overtook the United Kingdom to become the fifth largest economy.
Newsom expressed concern over federal policies under the Trump administration, warning that aggressive tariffs could undermine the state’s economic stability. He stressed the need to protect California’s economy, which he described as a driving force behind the nation’s overall growth.
Last week, California took legal action against the US federal government, becoming the first state to challenge the Trump administration’s tariff measures. State officials argue the tariffs are unconstitutional, asserting that only Congress has the authority to impose such policies.
During a press conference announcing the lawsuit, Newsom said California stood to suffer more than any other state under the current tariff regime. He described the moment as serious and cautioned that the damage caused could not be easily reversed.
Even as the state grapples with a severe housing crisis and rising homelessness, its population has continued to grow. Tourism has also seen a boost, with the state reporting record-high spending last year. However, not all trends are positive—visits from Canada dropped by 12% in February compared to the same month the previous year, a decline linked to the ongoing trade tensions.
In response, California has launched a targeted campaign to win back Canadian tourists. One city has gone so far as to display pro-Canada signage throughout its downtown area to help reverse the downturn.
