Jamie Dimon’s Warning On Tariffs
Dimon’s warning on tariffs
With President Trump’s tariffs dominating the headlines, it was inevitable that Jamie Dimon would tackle the topic in his latest letter to JPMorgan Chase shareholders, published this morning.
The wave of levies, Dimon writes, may be rooted in legitimate concerns. But the way the trade fight is playing out risks short-term pain and long-term damage to the global economic order, he adds.
Tariffs will “slow down growth,” though it’s too early to say a full-blown recession is coming, Dimon writes. While the U.S. economy had been “rather healthy and steady” for years, it had already begun weakening before Trump’s tariff announcement. (His own analysts warn that a recession is more likely than not this year.)
Dimon notes that there’s still a lot unknown about how the tariffs fight will play out, including how other countries will respond; the effects on consumers and investors’ confidence; what might happen to the dollar; and more.
In the short term, he writes, “We are likely to see inflationary outcomes, not only on imported goods but on domestic prices, as input costs rise and demand increases on domestic products. How this plays out on different products will partially depend on their substitutability and price elasticity.”
Dimon writes that inflation was already built into his global outlook, given high and “not sustainable” fiscal deficits, remilitarization across the world and a need for more infrastructure investment.
There are longer-term implications, Dimon writes. Among them: whether America’s long-term economic partnerships suffer. The consequences could be severe:
Our long-term strategic goals should be crystal clear: to maintain the cohesion and strength of the Western world, including their economies. If the Western world’s military and economic alliances were to fragment, America itself would inevitably weaken over time.
A fragmenting of Europe and disruption to longtime alliances could force nations to seek out partnerships with the likes of Russia, Iran and China. “America First is fine, as long as it doesn’t end up being America alone,” Dimon writes.
Dimon’s words reflect the uncertainty dominating Wall Street, which has been bracing for more chaos. Traders and hedge funds have been nursing losses. Deal-making — a business that bankers had hoped would pick up this year, with the prospect of deregulation and tax cuts under Trump — has instead stalled, with several big I.P.O.s having been postponed.
Dimon writes that JPMorgan, whose traders can profit off the market volatility, won’t necessarily suffer. But, he adds, “It is not particularly good for the capital markets.”
Expect him to face more questions from analysts about his outlook when JPMorgan reports quarterly results on Friday.
Jamie Dimon’s Warning On Tariffs
Dimon’s warning on tariffs
With President Trump’s tariffs dominating the headlines, it was inevitable that Jamie Dimon would tackle the topic in his latest letter to JPMorgan Chase shareholders, published this morning.
The wave of levies, Dimon writes, may be rooted in legitimate concerns. But the way the trade fight is playing out risks short-term pain and long-term damage to the global economic order, he adds.
Tariffs will “slow down growth,” though it’s too early to say a full-blown recession is coming, Dimon writes. While the U.S. economy had been “rather healthy and steady” for years, it had already begun weakening before Trump’s tariff announcement. (His own analysts warn that a recession is more likely than not this year.)
Dimon notes that there’s still a lot unknown about how the tariffs fight will play out, including how other countries will respond; the effects on consumers and investors’ confidence; what might happen to the dollar; and more.
In the short term, he writes, “We are likely to see inflationary outcomes, not only on imported goods but on domestic prices, as input costs rise and demand increases on domestic products. How this plays out on different products will partially depend on their substitutability and price elasticity.”
Dimon writes that inflation was already built into his global outlook, given high and “not sustainable” fiscal deficits, remilitarization across the world and a need for more infrastructure investment.
There are longer-term implications, Dimon writes. Among them: whether America’s long-term economic partnerships suffer. The consequences could be severe:
Our long-term strategic goals should be crystal clear: to maintain the cohesion and strength of the Western world, including their economies. If the Western world’s military and economic alliances were to fragment, America itself would inevitably weaken over time.
A fragmenting of Europe and disruption to longtime alliances could force nations to seek out partnerships with the likes of Russia, Iran and China. “America First is fine, as long as it doesn’t end up being America alone,” Dimon writes.
Dimon’s words reflect the uncertainty dominating Wall Street, which has been bracing for more chaos. Traders and hedge funds have been nursing losses. Deal-making — a business that bankers had hoped would pick up this year, with the prospect of deregulation and tax cuts under Trump — has instead stalled, with several big I.P.O.s having been postponed.
Dimon writes that JPMorgan, whose traders can profit off the market volatility, won’t necessarily suffer. But, he adds, “It is not particularly good for the capital markets.”
Expect him to face more questions from analysts about his outlook when JPMorgan reports quarterly results on Friday.