California’s GDP Reaches $4.1 Trillion in 2024, Setting New Milestones

California has achieved a significant economic milestone by surpassing Japan in Gross Domestic Product (GDP), with a reported nominal GDP of $4.1 trillion for 2024. This impressive figure positions California as the fourth-largest economy in the world, trailing only the United States, China, and Germany. Governor Gavin Newsom emphasized the importance of protecting this economic growth, warning that President Donald Trump’s tariff policies could jeopardize the state’s prosperity.

California’s Economic Growth

According to preliminary data from the U.S. Bureau of Economic Analysis, California’s economy grew by 6 percent in 2024, outpacing major global economies. The state’s GDP now exceeds Japan’s GDP of $4.02 trillion, as reported by the International Monetary Fund. With a population nearing 40 million, California accounts for 14 percent of the total GDP of the United States. The state’s economic success is largely driven by its robust technology sector, a thriving real estate market, and a strong financial industry. Governor Newsom highlighted California’s commitment to innovation and sustainability as key factors in its economic achievements.

Concerns Over Tariff Policies

Despite the positive economic indicators, Governor Newsom expressed concern over the potential impact of federal tariff policies on California’s economy. He described these policies as “reckless,” suggesting they could undermine the state’s economic progress. Newsom stated, “California’s economy powers the nation, and it must be protected.” His administration has taken legal action against President Trump, filing a federal lawsuit that challenges the use of emergency powers to impose tariffs on key trading partners, including Mexico, Canada, and China.

Legal Action Against Tariffs

The lawsuit filed by Newsom argues that the tariffs, which include a blanket 10 percent tax on all imports, are unlawful and unprecedented without congressional approval. The International Emergency Economic Powers Act (IEEPA), enacted in 1977, allows presidents to impose economic sanctions during national emergencies but requires consultation with Congress. California’s two-way trade reached $675 billion in 2024, with Mexico, Canada, and China as its primary trading partners, accounting for over 40 percent of the state’s imports.

Wider Implications and Response

In a coordinated effort, twelve other states joined California in filing lawsuits against the Trump administration, claiming that the tariffs constitute illegal tax increases. The White House has dismissed these legal challenges, labeling them a “witch hunt.” As California continues to assert its economic influence, the outcome of these legal battles may have significant implications for the state’s businesses and residents, as well as for the broader U.S. economy.

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