JPMorgan Chase’s CEO, Jamie Dimon, addressed concerns over President Donald Trump’s tariff policy in his annual letter to shareholders. He warned that the policy could potentially increase inflation and heighten the risk of a recession. Dimon’s deeper worry is about the potential long-term damage to the United States’ alliances with key military and trade partners.
Dimon, who has led JPMorgan Chase for nearly two decades, emphasized that his principal concern is not the immediate economic effects but the prospective impacts on America’s relationships with crucial partners. President Trump’s recent announcement on April 2 included economic sanctions that apply equally to allies and adversaries, with the European Union facing a 20% tariff hike. World leaders have voiced their displeasure at the tariff policy and pledged to negotiate with the U.S., but it remains unclear if these negotiations will satisfy the Trump administration.
In the letter, Dimon mentioned that the tariffs would likely lead to inflation and raise the possibility of a recession, urging caution due to these substantial and somewhat unparalleled forces. He expressed a grave concern for how the policy might affect America’s long-term alliances.
Dimon also pointed to Europe as an area of geopolitical tension, exacerbated by the ongoing conflict between Ukraine and Russia. President Trump’s recent public disagreement with Ukraine’s Prime Minister Volodymyr Zelenskyy and his discontent with Russian President Vladimir Putin add to these tensions.
The CEO underscored the importance of maintaining alliances, both military and economic, and cautioned against the potential for increasing dependency on rivals like China and Russia. Dimon remarked that America’s objective should be to bolster European nations and maintain proximity, warning that economic weakness in Europe could revert the region to a fragmented state reminiscent of pre-World War II conditions. He highlighted the dangers of nation-states seeking closer ties with Russia and Iran for energy and China for trade and economics, which could long-term increase dependency on these countries.
JPMorgan has recently raised its recession expectations from 40% to 60%, following similar actions from Goldman Sachs. Dimon described the immediate inflationary outcomes likely to result from tariffs, as the costs of both imported and domestic goods rise. He also noted the unpredictability of retaliatory actions, confidence impacts, investment, capital flow effects, and the implications for the U.S. dollar caused by the tariff policy.
Dimon closed his message by stating that resolving these issues quickly would mitigate some negative effects that could compound over time if left unaddressed. He expressed hope that post-negotiation, there would be positive outcomes for the United States.
