Although in fourth place for the largest economy, California outpaced the three largest economies with a growth rate of 6%. The U.S. economy grew 5.3%, China 2.6%, and Germany 2.9%. Between 2021 and 2024, California’s economy saw an average nominal GDP growth rate of 7.5%.

“California isn’t just keeping pace with the world—we’re setting the pace. Our economy is thriving because we invest in people, prioritize sustainability, and believe in the power of innovation,” Democratic Gov. Gavin Newsom said in a statement. “And, while we celebrate this success, we recognize that our progress is threatened by the reckless tariff policies of the current federal administration. California’s economy powers the nation, and it must be protected.”

The state sent over $83 billion more to the federal government than it received in federal funding. 

The state has become a hub for business start-ups, venture capitalists, high-tech companies, manufacturing, and agriculture.

California is the country’s number one in manufacturing output and employment, with 12% of the country’s total economic output coming from California. 

But Newsom has raised concerns about President Donald Trump’s “Liberation Day” tariff announcement, which placed additional tariffs on dozens of countries, many of which are close trading partners with the U.S. The plan is currently in the middle of a 90-day pause. However, Newsom filed a lawsuit last week challenging Trump’s use of emergency powers to enact his tariff agenda. 

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“The lawsuit seeks to end President Trump’s tariff chaos, which has wreaked havoc on the economy, destabilized the stock and bond markets, caused hundreds of billions of dollars in losses, and inflicted higher costs for consumers and businesses,” a press release stated. 

Experts say the combined tariffs on China, Canada, and Mexico are projected to cause the United States to lose $100 billion in GDP.