CNN
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JP Morgan CEO Jamie Dimon issued a dull warning about President Donald Trump’s tariff policy. It threatens to raise prices, drive the global economy into a slump and weaken America’s position around the world.
“Recent tariffs are likely to increase inflation, causing many to increase the likelihood of a recession,” Dimon warned in an annual letter to shareholders. “Whether the tariff menu will cause a recession remains a question, but it will slow growth.”
Dimon, one of the world’s most influential business leaders, said America’s “extraordinary position” in the world was built on its economic, military and moral strength. However, tariffs and Trump’s “America First” foreign policy could undermine the US’s special position in the world.
“Unless it’s only America, not just America, then America’s first is fine,” Dimon said. “If the military and economic alliances of the Western world are fragmented, America itself will inevitably weaken over time,” he said.
Dimon also pointed out that these forces are closely related. “It is very important to recognize that security and economics are interrelated. “Economic” wars have caused military wars in the past,” he writes.
In past letters, Dimon warned of geopolitical factors such as wars in Ukraine and the Middle East, saying he threatened to send a strong shockwave across the world economy. However, Dimon rarely is very dull about a single US economic policy.
Dimon has been largely silent on Trump’s tariff policy ever since January told CNBC that if the president’s tariffs boosted US production while causing a bit of inflation, people should “get over it.”
In his letter on Monday, Dimon acknowledged that “damages to trade practices” especially from China are hurting workers.
But the tariffs announced by Trump are far more severe and widespread than expected. Dimon now sounds a very different tone: adorn yourself.
Despite the recent market plunge, stocks could still fall further, Dimon argued. The US stock market is scheduled to open near Bear Market territory on February 19th after hitting a record high seven weeks ago. This could be the market shift from the second fastest peak in history to the bear (the fastest of the 2020 pandemic).
“Even with recent declines in market value, prices remain relatively high,” Dimon said. “These important, somewhat unprecedented forces will remain extremely cautious on us.”
The CEO of JPMorgan, like other business leaders, claimed that until recently the US economy appeared to be in a solid form.
“In spite of the volatile landscape, at least until recently, the US economy remained resilient as consumers still spend (which has been weakening recently) and businesses are still healthy,” Dimon said.
However, Dimon struck a cautious tone about: focusing on the geopolitical and financial challenges facing the US and the world:
“We are facing the most dangerous and complex geopolitical and economic environment since World War II,” he said.
This story has been updated with additional context and development.
