CNN
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JPMorgan CEO Jamie Dimon has issued a blunt warning about President Donald Trump’s tariff policy: It threatens to raise prices, drive the global economy into a downturn and weaken America’s standing in the world.
“The recent tariffs will likely increase inflation and are causing many to consider a greater probability of a recession,” Dimon warned in his annual letter to shareholders. “Whether or not the menu of tariffs causes a recession remains in question, but it will slow down growth.”
Dimon, one of the world’s most influential business leaders, said America’s “extraordinary standing” in the world was built on the strength of its economy, military and morals. But tariffs and Trump’s “America First” foreign policy could undermine the United States’ special position in the world.
“America First is fine, as long as it doesn’t end up being America alone,” Dimon said. “If the Western world’s military and economic alliances were to fragment, America itself would inevitably weaken over time,” he said.
Dimon also pointed out that these forces are inextricably linked. “It is extremely important to recognize that security and economics are interconnected – “economic” warfare has caused military warfare in the past,” he wrote.
In past letters, Dimon has warned about geopolitical factors, such as the wars in Ukraine and the Middle East, which he said threatened to send powerful shockwaves throughout the global economy. But rarely has Dimon been so blunt about a single US economic policy.
Dimon has been largely silent about Trump’s tariff policy since he told CNBC in January that, if the president’s tariffs helped boost US manufacturing while causing a little bit of inflation, then people should “get over it.”
In his letter on Monday, Dimon acknowledged that “damaging trade practices,” especially from China, have hurt workers.
But the tariffs Trump has announced are far more severe and widespread than most expected. Dimon is sounding a very different tone now: Brace yourselves.
Despite a recent plunge in markets, stocks could tumble much farther still, Dimon argued. The US stock market is set to open close to bear market territory after hitting a record high less than seven weeks ago, on February 19. It could be the second-fastest peak-to-bear market shift in history (the fastest occurred during the 2020 pandemic).
“Even with the recent decline in market values, prices remain relatively high,” Dimon said. “These significant and somewhat unprecedented forces cause us to remain very cautious.”
The JPMorgan CEO, like other business leaders, argued that up until recently, the US economy looked to be in solid shape.
“Despite the unsettling landscape, the US economy, at least until recently, continued to be resilient, with consumers still spending (though with some recent weakening) and businesses still healthy,” Dimon said.
But Dimon struck a cautious tone about what’s next, noting the geopolitical and financial challenges facing the United States and the world.
“We face the most perilous and complicated geopolitical and economic environment since World War II,” he said.
This story has been updated with additional context and developments.
