JPMorgan & Chase chief executive Jamie Dimon warned that uncertainties around President Donald Trump’s sweeping tariffs should be resolved quickly — since the trade policy could reheat inflation and slow growth.
In his annual letter to shareholders, Dimon, 69, warned of several possible negative effects from Trump’s hefty new tariffs, like retaliatory actions from foreign countries, as well as hampering consumer confidence, investments and capital flows, corporate profits and the US dollar.
“The quicker this issue is resolved, the better because some of the negative effects increase cumulatively over time and would be hard to reverse,” Dimon wrote. “In the short run, I see this as one large additional straw on the camel’s back.”
Dimon argued Trump’s latest, and most expansive, package of tariffs will “likely increase inflation” and “will slow down growth,” while the possibility of a recession “remains in question.”
He noted, though, that the economy was already weakening before Trump announced his tariff plans, and that he’s hopeful the taxes will have some long-term “positive benefits” for the US after negotiations.
During a press conference in the White House’s Rose Garden on Wednesday, Trump revealed the batch of so-called “reciprocal” tariffs – including a 10% baseline tax for all imports and much harsher rates on many nations.
The Dow plunged nearly 4,000 points in just two days as US stocks nosedived, leading a global market rout. Gold prices shot skyward as fearful investors sought safe havens.
Wall Street continued to suffer declines on Monday after Trump over the weekend showed no sign of abandoning his tariff plan anytime soon, commenting on the market losses that “sometimes you have to take medicine to fix something.”
The longtime JPMorgan executive – who has led the bank for nearly 20 years – cautioned that the economy is facing significant turbulence, especially geopolitical tensions.
In particular, Dimon cited “the potential positives of tax reform and deregulation and the potential negatives of tariffs and ‘trade wars,’ ongoing sticky inflation, high fiscal deficits and still rather high asset prices and volatility.”
Dimon said his main concern is how Trump’s tariffs “will affect America’s long-term economic alliances.”
“America First is fine, as long as it doesn’t end up being America alone,” Dimon wrote, adding that the country’s role as a world leader is being challenged not just by foreign adversaries but also by its own “polarized electorate.”
It’s essential that the US maintains its strong relationships with foreign allies, especially military and economic ties, Dimon wrote.
He cautioned against a “false sense of security” that nations won’t use their military and economic power to advance their goals against Western democracies that appear weakened.
International partnerships including NATO, the United Nations and the International Monetary Fund must be strengthened, Dimon added.
Though we may always have a “complex relationship” with China, the nation “will be better off forming partnerships with a strong Western world than with nations like Russia, Iran and others,” Dimon continued.
