TLDR

Table of Contents

JPMorgan CEO Jamie Dimon warns Trump’s tariffs will increase inflation and raise recession risks
Tariffs will drive up prices on both imported and domestic goods
Global markets including crypto have fallen sharply since Trump’s tariff announcement
Bitcoin dropped below $79,000, trading at $78,235
Dimon supports “America First” but cautions against “America alone” approach

Jamie Dimon, CEO of JPMorgan Chase, has issued a warning about President Donald Trump’s tariff policy, stating it could lead to higher inflation and increase the chances of an economic downturn. In his annual letter to shareholders released on Monday, Dimon expressed concern that the newly announced tariffs would have negative short-term effects on the U.S. economy.

“The recent tariffs will likely increase inflation and are causing many to consider a greater probability of a recession,” Dimon wrote. “Whether or not the menu of tariffs causes a recession remains in question, but it will slow down growth.”

The JPMorgan chief explained that price increases would affect not only imported goods but domestic products as well. As input costs rise and demand for domestic products increases, inflationary outcomes are likely across the board.

Dimon’s comments come at a time when global markets have been struggling. Since Trump’s tariff announcement last week, stocks have experienced their worst decline since the COVID-19 pandemic began in 2020.

Market Impact Already Visible

The effects of the tariff policy are already being felt in financial markets, including cryptocurrency. Bitcoin fell below $79,000 to its lowest point since November and is currently trading at $78,235. The CoinDesk 20, which tracks the 20 largest crypto assets by market capitalization, has dropped more than 10% and is down nearly 20% over the past month.

These market movements suggest investors are concerned about the economic impact of Trump’s trade policies. The uncertainty created by the tariffs has contributed to volatility across various asset classes.

Dimon noted that the U.S. economy was “already weakening” in recent weeks, even before Trump’s April 2 tariff announcement. He pointed out that the economy is facing “considerable turbulence” from multiple factors.

Questioning the Soft Landing

While Dimon acknowledged there are legitimate reasons for the tariffs, he emphasized the need to consider their short-term effects. He warned that the negative consequences of these policies would increase over time and could be difficult to reverse.

“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 stated. “In the short run, I see this as one large additional straw on the camel’s back.”
The JPMorgan CEO also questioned whether markets are being too optimistic about the economy’s trajectory. “Markets still seem to be pricing assets with the assumption that we will continue to have a fairly soft landing,” Dimon said. “I am not so sure.”

Global Alliances at Risk

While Dimon supports an “America First” approach to foreign policy, he cautioned against isolationism. “America First is fine, as long as it doesn’t end up being America alone,” he wrote.

He warned that fragmenting Western military and economic alliances would weaken America over time. Dimon argued for strengthening the global system that has led to decades of peace and prosperity rather than abandoning it.

“If the Western world’s military and economic alliances were to fragment, America itself would inevitably weaken over time,” Dimon cautioned.

Dimon is the first CEO of a major Wall Street bank to publicly address Trump’s sweeping tariff policy as markets tumble. His remarks appear to backtrack from comments he made in January when he said people should “get over” tariff concerns because they were good for national security.

The bank chief noted that Trump’s tariff policy has created “many uncertainties,” including its effect on global capital flows, the dollar, corporate profits, and the response from trading partners.

JPMorgan Chase has performed well under Dimon’s leadership, with seven consecutive years of record revenue. However, he emphasized that the bank’s success depends on the long-term health of America and the future of the free and democratic world.

Dimon urged addressing challenges with common sense and maintaining the U.S. military “at whatever cost” to ensure continued American leadership in a changing global landscape.

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