Jamie Dimon, chief executive officer at JPMorgan Chase & Co, has warned that the recent tariff measures announced by US President Donald Trump may spark inflation and lead to recession in the world’s biggest economy.
In his annual letter to shareholders, he has also suggested that the US develop closer trade ties with countries like India instead of asking them to align themselves with the US.
“The recent tariffs will likely increase inflation and are causing many to consider a greater probability of a recession,” he has said, cautioning that the market valuations remain relatively high. “These significant and somewhat unprecedented forces cause us to remain very cautious,” he said on Monday.
Dimon said even if the tariffs don’t cause a recession, it will slow down growth.
“The economy is facing considerable turbulence (including geopolitics), with the potential positives of tax reform and deregulation and the potential negatives of tariffs and “trade wars,” ongoing sticky inflation, high fiscal deficits, and still rather high asset prices and volatility,” Dimon added.
The tariffs will likely cause some important short-term effects, according to him. “As for the short-term, 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 product,” he said.
Flagging that the US lacks trade agreements with some of its closest allies, he said that Washington could bring nonaligned nations like India closer by extending a friendly hand.
“Deepening high-standard trade with key trading partners is good economics and great geopolitics. We don’t need to ask many nonaligned nations, like India and Brazil, to align with us – but we can bring them closer to us by simply extending a friendly hand with trade and investment,” said Dimon.
The US has hiked duty on Indian imports to 26% and imposed 10% tariffs on products from Brazil.
Billionaire investor Bill Ackman, CEO of Pershing Square, too warned: “We are in the process of destroying confidence in our country as a trading partner, as a place to do business, and as a market to invest capital.”
Warning shots were heard from staunch loyalist Senator Ted Cruz as well, hinting at a rebellion brewing in the Republican camp. “If we go into a recession, particularly a bad recession, 2026, in all likelihood politically, would be a bloodbath,” he cautioned on his Verdict podcast.
The criticism came on a day Trump’s protectionist policies worsened a selling frenzy on trading floors across the world, extending losses to trillions since the President announced reciprocal, yet discounted, tariffs on the world. He, however, struck a defiant note on Monday, equating the tariffs to a “medicine” that was required to fix the economy.
Trump also announced 50% additional tariffs on China on Monday, worsening its trade war after Beijing retaliated with 34% duties to his tariffs salvo. This effectively raises the total US tariffs on Chinese goods to 84%.
