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Dimon said that the US should foster stronger trade relationships with nations like Indian instead of asking them to align themselves with the US.
Chief Executive Officer at JPMorgan Chase & Co, Jamie Dimon. (Reuters)
Chief Executive Officer at JPMorgan Chase & Co Jamie Dimon 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.
Dimon, in his annual letter to stakeholders, said that the US should foster stronger trade relationships with nations 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.
The CEO added that even though the tariffs don’t cause a recession, they 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.
According to Dimon, the tariffs are expected to have significant short-term consequences, including inflationary pressures on both imported and domestic goods.
“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.
Highlighting that the US lacks trade agreements with some of its closest allies, Dimon 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.
This comes after the US hiked duties on Indian imports to 26 per cent and imposed 10 per cent tariffs on products from Brazil.
Bill Ackman, CEO of Pershing Square, also cautioned that the current situation is eroding trust in the US as a reliable trading partner, business destination, and investment hub, stating, “We’re in the process of destroying confidence in our country.”
Staunch loyalist Senator Ted Cruz also hinted 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 warnings came after President Trump’s protectionist policies sparked a global market sell-off, exacerbating losses to trillions of dollars. Despite this, Trump remains resolute, likening tariffs to “medicine” necessary for economic recovery.
