‘We’ve become like Europe’: Jamie Dimon warns China is beating the U.S. as he says Iran war means a ‘better chance’ of permanent Middle East peace

JPMorgan CEO Jamie Dimon is warning the U.S. is moving more like Europe when it comes to defense.

Speaking Tuesday at the Hill and Valley Forum, which aims to bring together leaders from Washington and Silicon Valley, the longtime JPMorgan leader who led his bank through the 2008 housing crisis, said he was “deeply frustrated” with certain policies in the U.S. that he said set the country back. 

One example is the web of rules, compliance procedures, and the involvement of Congress that he said slows the procurement process for the Department of War (DoW) and prevents it from being adaptable in times of conflict that require quick pivots.

“We’ve become like Europe, we’re unable to move and change—change budgeting, change procurement. You know, let people do what they need to do.” 

One suggestion Dimon thinks would help improve the country’s red tape? Bringing on more private companies to get involved with making military equipment. To be sure, private companies are already participating actively in the U.S. defense industrial base. Although companies such as Northrop Grumman, Lockheed Martin, and RTX (previously Raytheon) have dominated military contracts for years, the U.S. government is increasingly looking to newcomers such as SpaceX, Palantir, and Anduril for their tech capabilities. Earlier this month, the DoW awarded Anduril a five-to-ten year enterprise contract worth up to $20 billion, which is similar to one it would sign with a major defense contractor. 

Dimon added that building up the nation’s military is especially important as it faces geopolitical issues including the threat of a conflict with China.

Relations between the U.S. and China have been icy in recent years, as the two countries seek to dominate AI. The world’s second largest economy has in some years grown its GDP at nearly double the rate of the U.S. At the same time, a trade war between the two economies has seen Washington impose sweeping export controls on advanced chips in an effort to limit China’s technological advancement, while China weaponizes its rare Earth resources with its own export controls on the materials that are essential to building semiconductors, but also advanced weapons systems and electric vehicles. 

Dimon noted that U.S. companies made a mistake over the past decades in moving their supply chain to China just to produce a good for “$10 less.” This poses a major threat as China’s economy continues growing at a faster rate than that of the U.S. and threatens to overtake the country. Dimon also noted the risk that China may invade Taiwan is likely—something that is particularly concerning as Taiwan supplies 90% of the world’s most advanced microchips.

Still, the U.S. should also emulate China to an extent in the sectors where it has made significant progress, including shipbuilding, car manufacturing, and battery production.

“We should look at our own shortcomings then and then be prepared if they ever become an adversary to, you know, to face off against them,” he said.

Dimon’s comments come as the price tag of the Iran war has skyrocketed with the Pentagon last week reportedly requesting $200 billion from Congress on top of its existing budget, which exceeds $800 billion. Secretary of War Pete Hegseth has said “that number could move” as the Department of War seeks to replenish munition stockpiles and prepare “for what we may have to do in the future.”

Later in the interview Tuesday, Dimon painted a picture of “permanent peace” in the Middle East partly thanks to the threat of capital flight. In the process he became one of the first CEOs of a major company to foresee a potential positive impact stemming from the Iran war.

“There’s a lot of foreign direct investment going there, but it won’t go there if  things like this are taking place,” Dimon said of the Gulf countries who are particularly affected by the conflict. “They’ve realized no, they need permanent peace. They can’t have neighbors like lob ballistic missiles into their data centers.”

The JPMorgan CEO said he was optimistic about the war, saying it may lead to a lasting peace in the region in the long term because of the change in “attitude” among Gulf countries including Saudi Arabia, the United Arab Emirates, and Qatar. The Iran conflict, now in its fourth week, has made these countries realize they need peace to protect the influx of capital that has helped their economies grow and diversify over the past decade.

The Gulf states have tried for years to diversify their economies to prevent them from being entirely oil dependent, and have brought in billions in foreign investment in the process. Still, the Iran war has once again highlighted the instability of their region. Strikes by Iran on military targets as well as Amazon data centers in the UAE and Bahrain have spooked investors who have over years flooded the region with investment, especially in low-tax emirates in the UAE like Dubai and Abu Dhabi that have marketed themselves as safe, globally connected business hubs.

While some skeptics of the Iran war have said the country didn’t pose any imminent threat to the U.S., Dimon disagreed, labeling the country “a terrorist threat.” Iran-backed militias and the proxy conflicts Iran has waged in the region have been responsible for the death of hundreds of Americans, according to the Pentagon. During the Iraq war, the White House says Iran-backed militants killed 603 American troops, along with dozens of others in the years since the 1979 Iran hostage crisis and into the present day.

“They’ve been murderers of Americans and other people for 40 or 50 years. That’s not a threat. That’s actual killing,” Dimon said.

Dimon’s comments come as President Donald Trump on Sunday said the U.S. would not strike Iranian energy infrastructure and power plants for five days as U.S. envoys negotiate with their counterparts in Iran. 

While it’s unclear whether these talks, which Iran has denied, will yield any peace accord, Dimon said he is hopeful the conflict will bring about better prospects for the whole of the Middle East.

“I think the Iran war makes it a better chance in the long run,” Dimon said. “It’s probably riskier in the short run, because we don’t know the outcome of it, but Saudi Arabia, the UAE, Qatar, America, Israel, all want permanent peace in the Middle East.”

This story was originally featured on Fortune.com