California edges past Japan to secure fourth place in global economic hierarchy
California's Economic Ascendancy Under Threat
California has wrested the fourth spot from Japan in global economic rankings, boasting a staggering $4.1 trillion GDP in 2024, according to preliminary US Bureau of Economic Analysis data. This outpaces Japan's $4.02 trillion GDP, as reported by the International Monetary Fund. The Golden State's rapid growth of 6% last year has propelled it past the big three – the US, China, and Germany – making it the world's fourth-largest economy.
Governor Gavin Newsom hailed the achievement, emphasizing his state's focus on investing in people, prioritizing sustainability, and fostering innovation. However, Newsom's jubilation was tempered by concerns over President Trump's tariffs, which he believes pose a significant threat to California's economic growth.
California's economic strength, with a population of 40 million, accounted for 14% of the nation's GDP in 2024. The state's economic prowess is primarily driven by Silicon Valley, real estate, and finance sectors. In a recent legal move, Newsom sued Trump over the use of emergency powers to impose sweeping global tariffs, arguing they have hurt Californian families and businesses.
The lawsuit, filed in federal court on April 16, contends that Trump lacks the authority to enact tariffs against Mexico, China, and Canada, or a 10% baseline tariff on imports from the rest of the world. The suit claims these tariffs have disrupted supply chains, inflated costs, and inflicted billions in damages on California.
The lawsuit emphasizes the unlawfulness and unprecedented nature of Trump's use of the International Economic Emergency Powers Act to enact tariffs. This Act, passed in 1977, grants the president broad authority to impose sanctions, export controls, regulate financial transactions, and freeze foreign assets under national emergency declaration. However, it requires the Executive to consult and report to Congress when exercising these powers.
California engaged in nearly $675 billion of two-way trade in 2024, with Mexico, Canada, and China being its top three trade partners. Over 40% of Californian imports came from these countries, accounting for $203 billion of its more than $491 billion in total imports last year.
Joining California in its legal battle against Trump, twelve more states filed a lawsuit on April 16, protesting the illegal imposition of tariffs by the Trump administration. The White House dismissed the lawsuit as a "witch hunt."
- In response to California's economic growth, Governor Gavin Newsom, in a jubilant yet cautious tone, emphasized the state's focus on prioritizing sustainability, innovation, and investing in people for the fiscal growth of business.
- California's economic growth has been significant, with a GDP of $4.1 trillion in 2024, making it the world's fourth-largest economy, outpacing Japan's GDP and cementing its position past the big three – the US, China, and Germany.
- Aware of the potential threats to California's economic growth, Newsom sued President Trump over the use of emergency powers to impose tariffs, arguing these tariffs have hurt Californian families and businesses, disrupted supply chains, inflated costs, and inflicted billions in damages on California.
- The finance sector, alongside Silicon Valley and real estate, plays a crucial role in driving California's economic prowess, with the state engaging in nearly $675 billion of two-way trade in 2024, making Mexico, Canada, and China its top three trade partners.
- Despite California's legal battle against Trump, the White House dismissed the lawsuit, filed with the support of twelve more states, as a "witch hunt," highlighting the ongoing tension between business, politics, and general-news, particularly with regards to international trade and finance.
