JPMorgan Chase CEO Jamie Dimon said the tariffs announced last week by President Donald Trump would likely raise prices for both domestic and imported goods, weighing the already slowing down US economy.
Dimon, 69, worked on the tariff policy Trump announced in his annual shareholder letter on April 2.
“Given the good reasons for the newly announced tariffs, there are, of course, a few. Or it could be a good or bad, long-term effect, and a significant short-term effect,” Dimon said. “We could see inflationary results not only at imported goods but also at domestic prices as demand for domestic products increases and demand increases.”
“It remains a question of whether the tariff menu will cause a recession, but it will slow growth,” he said.
Dimon is the first CEO of a major Wall Street Bank to publicly address Trump’s sweeping tariff policies when global markets are crashing. The chairman of JP Morgan often uses his platform to highlight the geopolitical and financial risks he has seen, but this year’s letter comes at an unusually intense time. Stocks have been freefalling since Trump’s announcement shocked global markets, causing the worst week for US stocks since the outbreak of the 2020 symbiotic pandemic.
His comments appear to backtrack his previous comments in January. That’s when Dimon said people should “overcome” tariff concerns because it’s good for national security. At the time, tariff levels under discussion were much lower than those announced last week.
Trump’s tariff policies have created “a lot of uncertainty,” including global capital flows and impacts on the dollar, impacts on corporate profits, and responses from trading partners, Dimon said.
“The faster this problem is resolved, the better part of the negative effect will increase cumulatively over time and become more difficult to reverse,” he said. “In the short term, I see this as one big straw on a camel’s back.”
“I don’t really understand”
Dimon said the US economy had received nearly $11 trillion in government borrowing and spending support over the past few years, but it had already “already weakened” in recent weeks. Inflation can be more sticky than many people expect. In other words, he added that interest rates could continue to rise even as the economy slows.
“The economy is facing considerable turbulence (including geopolitics), with potential positives of tax reform and deregulation, potential negatives of tariffs and ‘trade wars,’ continued expansion of stickiness, high financial obstacles, and rather high asset prices and instability,” Dimon said.
Dimon also surprised the somewhat ominous note, taking into account how much US stocks have already fallen from the recent highs. According to the CEO of JPMorgan, both the stock and the credit spread could still be too optimistic.
“It appears that the market is still pricing the asset, assuming it continues to have a rather soft landing,” Dimon said. “I don’t really know.”
This story is developing. Please check for updates.
