The U.S. state of California says it has overtaken Japan to become the world’s fourth-largest economy in terms of nominal gross domestic product.

California recorded $4.1 trillion in nominal GDP in 2024, according to the U.S. Bureau of Economic Analysis data, Gov. Gavin Newsom announced last week. The figure was slightly higher than Japan’s $4.02 trillion as recorded by the International Monetary Fund.

Japan's annual GDP was surpassed by China in 2010 and Germany in 2023, positioning the country as the world’s No. 4 economy.

But fluctuations in exchange rates could have contributed to the flip-flop in terms of rankings. Japan’s nominal GDP in 2024 was ¥609.4 trillion, according to Cabinet Office data. The amount is roughly equal to $4.23 trillion, based on the exchange rate as of Sunday.

The yen broke the ¥140-to-the-dollar level last week as the strengthening of the Japanese currency came into focus as a possible demand by the United States in ongoing tariff negotiations. It then settled back over the course of the past week and was trading at ¥143.6 to the dollar as of Sunday.

Nonetheless, the state of California’s 6% year-on-year growth rate still surpasses the three countries with the largest economies in the world — the U.S. at 5.3%, China at 2.6% and Germany at 2.9%, according to the IMF.

“While we celebrate this success, we recognize that our progress is threatened by the reckless tariff policies of the current federal administration,” Newsom said in a statement released Wednesday.

U.S. President Donald Trump’s administration has rolled out a series of tariffs on almost all imports from almost every country since early March. Vehicles, steel and aluminum imports are now hit with a 25% tax, and all other goods, with a few notable exceptions, incur a 10% rate.

Higher rates could kick in if deals with individual countries are not struck by July, with Japan set to be slapped with 24% “reciprocal" tariffs that were briefly put in place on April 9. Tariffs on auto parts are already scheduled to begin in early May.

Newsom, a prominent Democrat and a potential presidential candidate in 2028, filed a lawsuit against Trump’s tariff policies in federal court earlier this month.

The IMF on Tuesday slashed its growth forecast for most countries across the globe in the wake of the Trump tariff announcements, with projected global growth this year dropping by 0.5 percentage points to 2.8%. Projected U.S. GDP growth is expected to dip 0.9 percentage points, to 1.8%.

“The swift escalation of trade tensions and extremely high levels of policy uncertainty are expected to have a significant impact on global economic activity,” according to the IMF.