{"id":134985,"date":"2025-04-25T03:20:22","date_gmt":"2025-04-25T03:20:22","guid":{"rendered":"https:\/\/quixnet.net\/wpinstance\/california-overtakes-japan-to-become-worlds-fourth-largest-economy-but-tariffs-pose-threat-los-angeles-times\/"},"modified":"2025-04-25T03:20:22","modified_gmt":"2025-04-25T03:20:22","slug":"california-overtakes-japan-to-become-worlds-fourth-largest-economy-but-tariffs-pose-threat-los-angeles-times","status":"publish","type":"post","link":"https:\/\/quixnet.net\/wpinstance\/california-overtakes-japan-to-become-worlds-fourth-largest-economy-but-tariffs-pose-threat-los-angeles-times\/","title":{"rendered":"California overtakes Japan to become world\u2019s fourth-largest economy. But tariffs pose threat – Los Angeles Times"},"content":{"rendered":"

If California were its own country, its economy would now rank as the fourth-largest of any nation across the globe, Gov. Gavin Newsom said, a new milestone that comes at a time of major economic turbulence.
California has long been a global powerhouse, fueled by a variety of sectors including technology, agriculture, tourism and entertainment. The new ranking comes as the state is facing challenges from a trade war with China and other nations that are key California trading partners.
Newsom announced the state\u2019s new economic ranking Wednesday after recently released data from the International Monetary Fund<\/a> and the U.S. Bureau of Economic Analysis<\/a> indicated that California\u2019s nominal gross domestic product now exceeds Japan\u2019s.
According to the data, California\u2019s nominal GDP reached $4.1 trillion, surpassing Japan\u2019s $4.02 trillion. That places the Golden State behind only the United States at $29.18 trillion, China at $18.74 trillion and Germany at $4.65 trillion.
\u201cCalifornia isn\u2019t just keeping pace with the world \u2014 we\u2019re setting the pace,\u201d Newsom said in a statement. \u201cOur economy is thriving because we invest in people, prioritize sustainability, and believe in the power of innovation.\u201d
Of the top-four global economies, California\u2019s is also the fastest growing, according to data and Newsom\u2019s office. Its nominal GDP grew at a rate of 6% in 2024, outpacing the U.S.\u2019 overall 5.3% rate, China\u2019s 2.6% rate and Germany\u2019s 2.9% rate. Meanwhile, Japan\u2019s growth has declined when measured in U.S. dollars, due in part to exchange-rate fluctuations and a drop in population.
In 2023, California\u2019s gross domestic product was about $3.9 trillion, comprising roughly 14% of the national GDP, according to data published in January by the Public Policy Institute of California.
California<\/a>
California\u2019s population grew by almost a quarter of a million in 2024, according to the U.S. Census Bureau. Experts say the figures represent an important turnaround.
Newsom attributed California\u2019s showing to a growing population and record tourism spending coupled with a high concentration of venture capital and new business ventures. He also touted the strength of the state\u2019s agricultural, high-tech and manufacturing centers.
Growth in jobs and businesses have largely powered the state\u2019s economy. And the Golden State has benefited from its ties to the global marketplace and its position as the hub of the world\u2019s entrepreneurs, experts say.
\u201cWe\u2019ve known for a long time that California is a very powerful economy. We have 40 million people. We have very productive workers and we have some unicorn businesses that have started here and continue here, such as Apple and Google,\u201d said Lee Ohanian, an economics professor at UCLA.
Real estate and finance have for decades been the largest contributors to the state\u2019s GDP. The professional services and information industries, driven largely by tech, have also grown significantly, data show.
California\u2019s labor market grew by roughly 30% \u2014 or 4.2 million jobs \u2014 between 1998 and the second quarter of 2024. Over the same time frame, the number of businesses with employees expanded more than 72%, according to the Public Policy Institute of California report.
The new data come at an uncertain time for the country as economists and business owners continue to sound the alarm about the toll a trade war could take on the economy, both in the United States and California.
President Trump\u2019s tariffs could hammer Southern California\u2019s nearly $300-billion trade and logistics industry in the coming years, according to a Los Angeles County Economic Development Corp. report released this week.
The effects of tariffs could jeopardize California\u2019s ability to remain in fourth place, Kevin Klowden, executive director of Milken Institute Finance, told The Times in an email.
\u201cShipping and logistics make up a huge part of the economy as do California\u2019s ties in supply chains, exports and entrepreneurial activity, especially to Asia,\u201d Klowden said. \u201cCalifornia is benefiting from the exemptions on computers and phones, but it is more exposed to world trade than most states. The main threat though is probably India, provided it is also not hit hard by tariffs.\u201d
Last week Newsom announced a lawsuit<\/a> challenging Trump\u2019s executive authority to enact international tariffs without the support of Congress, calling the president\u2019s economic policies a \u201cwrecking ball\u201d to America\u2019s global reputation.
Business<\/a>
Amid news of visa cancellations and deportations, state and local tourism officials are increasingly worried about the potential adverse effects on travel to Los Angeles and California.
The legal action argues that the International Emergency Economic Powers Act<\/a> that Trump cited to impose tariffs does not grant the president the ability to unilaterally adopt tariffs on goods imported to the U.S.
Newsom\u2019s office said California engaged in $675 billion in two-way trade last year and stands to lose billions in state revenue under Trump\u2019s initial tariff policies<\/a>. Some tariffs have since been relaxed.
\u201cWhile we celebrate this success, we recognize that our progress is threatened by the reckless tariff policies of the current federal administration,\u201d Newsom said in a statement this week on the new economic milestone. \u201cCalifornia\u2019s economy powers the nation, and it must be protected.\u201d
As U.S. and global markets tumbled following Trump\u2019s tariff announcement, Newsom announced that California would look for ways to expand trade and persuade international partners to continue working with the state, which he referred to as the \u201ctent pole of the U.S. economy.\u201d
The last time California advanced in world economic ratings was 2018, when its nominal GDP surpassed the United Kingdom\u2019s<\/a> to move into fifth place. India\u2019s economy, which is currently $3.90 trillion, is predicted to overtake California\u2019s in 2026, according to current data trends.
And even amid economic growth, the state is grappling with deep financial inequalities that persist between its various regions and other headwinds that could hamper further prosperity.
In 2023, the Bay Area\u2019s per capita income was $131,000, more than double that of the Inland Empire and Central Valley. Twenty-five years earlier, the regions had a roughly $32,000 difference at most in per capita income, according to the PPIC analysis.
The chronic problems of housing unaffordability, homelessness, delayed infrastructure improvements, issues surrounding water storage and conveyance, and the loss of private-sector jobs could be barriers to additional growth, Ohanian said.
Since September 2022, California\u2019s private sector has lost a net 154,000 jobs, while the public sector has gained 361,000, according to last year\u2019s Legislative Analyst\u2019s Office report. <\/a>
\u201cWe need those private-sector jobs because they provide the tax base and tax revenue that fund what the state and local governments do,\u201d Ohanian said. \u201cIf we can make progress on those fronts, then I think California growth will accelerate.\u201d
Times staff writer<\/i> Taryn Luna contributed to this report.<\/i>
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Hannah Fry covers breaking news for the Los Angeles Times. She most recently covered Orange County for The Times and has written extensively about criminal trials, housing, politics and government. In 2020, Fry was part of the team that was a Pulitzer finalist for its coverage of a boat fire that killed 34 people off the coast of Santa Barbara. Fry came to The Times from the Daily Pilot, where she covered coastal cities, education and crime. An Orange County native, Fry started her career as an intern at the Orange County Register.
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Clara Harter is a breaking news reporter at the Los Angeles Times. Previously, she covered politics and education for the L.A. Daily News. While at the Daily News, she published a series on fentanyl addiction that won a first-place investigative journalism award from the L.A. Press Club. Harter majored in political science and Middle Eastern studies at Columbia University. She loves surfing and, when not reporting, can most likely be found in the ocean.
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If California were its own country, its economy would now rank as the fourth-largest of any nation across the globe, Gov. Gavin Newsom said, a new milestone that comes at a time of major economic turbulence.California has long been a global powerhouse, fueled by a variety of sectors including technology, agriculture, tourism and entertainment. The […]<\/p>\n","protected":false},"author":1,"featured_media":134986,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":""},"categories":[10],"tags":[],"class_list":["post-134985","post","type-post","status-publish","format-standard","has-post-thumbnail","category-world","entry"],"_links":{"self":[{"href":"https:\/\/quixnet.net\/wpinstance\/wp-json\/wp\/v2\/posts\/134985","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/quixnet.net\/wpinstance\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/quixnet.net\/wpinstance\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/quixnet.net\/wpinstance\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/quixnet.net\/wpinstance\/wp-json\/wp\/v2\/comments?post=134985"}],"version-history":[{"count":0,"href":"https:\/\/quixnet.net\/wpinstance\/wp-json\/wp\/v2\/posts\/134985\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/quixnet.net\/wpinstance\/wp-json\/wp\/v2\/media\/134986"}],"wp:attachment":[{"href":"https:\/\/quixnet.net\/wpinstance\/wp-json\/wp\/v2\/media?parent=134985"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/quixnet.net\/wpinstance\/wp-json\/wp\/v2\/categories?post=134985"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/quixnet.net\/wpinstance\/wp-json\/wp\/v2\/tags?post=134985"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}