California overtakes Japan to become world’s fourth-largest economy. But tariffs pose threat

Los Angeles Times ^ | April 24, 2025 | By Hannah Fry and Clara Harter

[dennisw]

If California were its own country, its economy would now rank as 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 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’s new economic ranking Wednesday after recently released data from the International Monetary Fund and the U.S. Bureau of Economic Analysis indicated that California’s nominal gross domestic product now exceeds Japan’s.

According to the data, California’s nominal GDP reached $4.1 trillion, surpassing Japan’s $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.

“California isn’t just keeping pace with the world — we’re setting the pace,” Newsom said in a statement. “Our economy is thriving because we invest in people, prioritize sustainability, and believe in the power of innovation.”

Of the top-four global economies, California’s is also the fastest growing, according to data and Newsom’s office. Its nominal GDP grew at a rate of 6% in 2024, outpacing the U.S.’ overall 5.3% rate, China’s 2.6% rate and Germany’s 2.9% rate. Meanwhile, Japan’s growth has declined when measured in U.S. dollars, due in part to exchange-rate fluctuations and a drop in population.

In 2023, California’s gross domestic product was about $3.9 trillion, comprising roughly 14% of the national GDP

Newsom attributed California’s 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’s agricultural, high-tech and manufacturing centers.

[Svartalfiar]

Not just relative costs of living, but what would happen to the numbers if GDP was properly calculated with gov’t spending as a minus instead of a plus?

[Svartalfiar]

Those prices mean nothing. A Big Mac from Uber is going to be $10-20 in EVERY city in the country.

A real comparison would be what the price is listed on the menu at.