JPMorgan Chase CEO Jamie Dimon issued a dire warning Monday about the potential fallout from President Donald Trump's sweeping tariff policy, cautioning that the levies could drive inflation higher, weaken the U.S. economy, and erode America's global standing.
"The recent tariffs will likely increase inflation and are causing many to consider a greater probability of a recession," Dimon wrote 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."
The 69-year-old bank executive, long considered one of Wall Street's most influential voices, also warned of deepening global risks, calling today's economic environment "the most perilous and complicated geopolitical and economic environment since World War II."
Trump's announcement last week of new tariffs, including a 34% levy on Chinese goods, sent markets reeling and drew swift retaliation from Beijing. Dimon's letter marks the first major response from a top financial CEO, underscoring mounting concerns among business leaders about the escalating trade war.
Dimon acknowledged that "damaging trade practices," particularly by China, have harmed American workers, but he cautioned that Trump's aggressive approach could backfire. "America First is fine, as long as it doesn't end up being America alone," he wrote.
"Security and economics are interconnected - 'economic' warfare has caused military warfare in the past," Dimon added, warning that the U.S. risks alienating allies and disrupting global economic cooperation.
In contrast to more supportive remarks he made in January - when the proposed tariffs were more modest - Dimon's latest assessment painted a grimmer outlook. "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," he wrote.
Dimon also emphasized that markets may not be pricing in the full risk. "Markets still seem to be pricing assets with the assumption that we will continue to have a fairly soft landing. I am not so sure," he said.
Stocks have already suffered steep declines since the tariff announcement, with the S&P 500 on the cusp of bear market territory. Dimon noted that even after the sharp drop, "prices remain relatively high," suggesting further downside could follow.
He urged quick resolution, warning that the damage from tariffs could become permanent if left unchecked. "The quicker this issue is resolved, the better because some of the negative effects increase cumulatively over time and would be hard to reverse," he said.
