The president of the largest American bank has warned that Trump’s stringent tariffs are likely to increase inflation and could potentially steer the global economy towards a recession.
“The recent tariffs will probably heighten inflation and many are now considering a greater probability of recession. Whether or not the complete set of tariffs will cause a recession remains a question, but it will slow down growth,” stated Dimon in a letter to JPMorgan Chase shareholders.
He further criticized Trump’s “America First” mentality, which imposes very high tariffs on trade partners and strategic competitors, arguing that it could undermine the country’s advantageous position.
“If the military and economic alliances of the Western world were to fragment, the United States would inevitably weaken over time. It’s extremely important to recognize that security and the economy are interconnected; ‘economic’ wars have led to military wars in the past,” he wrote.
Trump’s tariff plan includes a general rate of 10% and higher rates against other countries and blocs, such as 20% on European imports, 34% on Chinese imports, and 26% on Indian imports.
Last week, the Nasdaq had already lost 10%, the S&P 500 fell by 9%, and the Dow Jones by 7.9%.
Moreover, in the two sessions following the tariff plan announcement, Wall Street shed about $6.4 trillion in value, amounting to a total of $10 trillion since Trump’s inauguration.
Despite recent market declines, Dimon noted that stocks could fall further.
“Even with the recent market value drop, prices remain relatively high, requiring us to remain very cautious,” the bank’s CEO stated.
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