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California’s economy has surpassed that of Japan, making the state the world’s fourth largest economy, according to newly released data.Governor Gavin Newsom highlighted figures from the International Monetary Fund (IMF) and the U.S. Bureau of Economic Analysis showing California’s gross domestic product (GDP) reached $4.10 trillion (£3.08 trillion) in 2024, edging out Japan’s $4.01 trillion. Only Germany, China, and the U.S. as a whole now rank higher.“California isn’t just keeping up with the global economy — we’re leading it,” Newsom said.The economic milestone comes as Newsom continues to push back against President Donald Trump’s sweeping tariffs and warns of potential risks to the state’s economic momentum.California boasts the nation’s largest share of both manufacturing and agriculture. It’s also a global hub for tech innovation, the epicenter of the entertainment industry, and home to the U.S.’s two busiest seaports.Newsom, a high-profile Democrat and potential 2028 presidential contender, has filed a legal challenge to Trump's authority to implement the tariffs, which have disrupted global trade and financial markets.Trump has enacted 10% tariffs on nearly all U.S. imports after instituting a 90-day pause on additional hikes. He has also levied a 25% tariff on goods from Mexico and Canada. The tariffs on Chinese imports have triggered a full-blown trade war with the world’s second-largest economy.The Trump administration recently confirmed that, when combined with previous measures, the effective tariff rate on some Chinese goods could reach as high as 245%.Despite California’s economic gains, Newsom warned about potential fallout.“We celebrate this achievement, but we remain deeply concerned that the administration’s reckless trade policies pose a real threat to our continued success,” he said. “California drives the national economy — and it deserves protection.”Trump has defended the tariffs as a necessary step to correct trade imbalances and bring manufacturing and jobs back to the U.S. The tariffs, along with interest rate cuts, form key pillars of his broader economic strategy.The latest data ranks California’s GDP just behind Germany’s $4.65 trillion, China’s $18.74 trillion, and the U.S. total of $29.18 trillion. California also posted the fastest growth among the top economies.Japan, meanwhile, faces economic headwinds from a shrinking and aging population, which continues to strain its labor force and inflate social spending.