Dimon: Trump tariffs will boost prices, weigh down economy
JPMorgan Chase CEO Jamie Dimon is warning investors that the U.S. economy is facing "considerable turbulence," calling President Trump's escalating trade war, which has sent markets reeling, "one large additional straw on the camel’s back"
"The recent tariffs will likely increase inflation and are causing many to consider a greater probability of a recession," Dimon wrote in a letter to shareholders Monday morning. "Whether or not the menu of tariffs causes a recession remains in question, but it will slow down growth."
Trump unveiled his sprawling tariffs on Wednesday — an effort he says will ultimately better position the U.S. for growth and encourage American production. He has repeatedly likened the U.S. economy and reliance on trade to a sick patient that needed an operation.
"I don’t want anything to go down, but sometimes you have to take medicine to fix something," Trump told reporters aboard Air Force One as he returned from Florida to Washington, D.C., Sunday evening.
The markets continued to freefall early Monday, but then bounced back later in the morning, apparently on optimism that Trump was considering a 90-day pause in tariffs. However, the White House pushed back on that notion.
Dimon, who has led the nation's largest bank for nearly two decades and is considered one of the world’s most influential businessmen, wrote that he is hoping expedited negotiations on tariffs will settle markets but added that his chief concern is "how this will affect America’s long-term economic alliance."
"There are many uncertainties surrounding the new tariff policy: the potential retaliatory actions, including on services, by other countries, the effect on confidence, the impact on investments and capital flows, the effect on corporate profits and the possible effect on the U.S. dollar," he wrote in his analysis to shareholders.
"The quicker this issue is resolved, the better because some of the negative effects increase cumulatively over time and would be hard to reverse. In the short run, I see this as one large additional straw on the camel’s back."
He described the tariffs as exacerbating an already rocky outlook.
"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 wrote.
Dimon’s letter comes as other business leaders sound alarms.
Billionaire hedge fund investor Bill Ackman, who endorsed Trump last year, penned an open letter about his concerns on social media Sunday evening.
"Business is a confidence game. The president is losing the confidence of business leaders around the globe," he wrote on X. "The consequences for our country and the millions of our citizens who have supported the president — in particular low-income consumers who are already under a huge amount of economic stress — are going to be severely negative."
“If you haven’t noticed by now, I speak the truth regardless of the consequences to me personally or what other people think,” Ackman wrote in a follow-up post after facing backlash from some Trump supporters online.