The Turn Of The Screw. JPMorgan's Jamie Dimon Warns Trump Trade War Could See The U.S. Lose Credibility

JPMorgan Chase JPM CEO Jamie Dimon has fired a warning shot about President Donald Trump‘s trade war, which has put the stock market on a wild ride, unnerving investors. The Wall Street titan warned of a loss of U.S. credibility on the national stage, a recession and worse, should the trade war continue.

Usually one of the more outspoken power players on Wall Street, Dimon has, until recently, been tempered in his appraisal of the president’s more controversial policies. He told CNBC in February that he hoped the president’s Department of Government Efficiency would be “quite successful.” This followed a curt message on CNBC a month earlier to protesters of Trump’s tariff policy: “Get over it.” The longtime CEO appears to have changed his tune since then, warning the Financial Times on April 16 that the U.S. could lose its credibility on the international stage if the trade war continues. 

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“Negotiate Trade Deals”

“I would like to see the administration negotiate trade deals. I think they’ll be good for everybody, and they want to do it too. They’ve said they want to do it. They’ve said they’re having conversations with 70, 80 different people. And so I do think if the regulators change regulations, it will free up capital and liquidity to finance the system," Dimon said during JPMorgan Chase's first-quarter earnings call on April 11.

He also said he expects tariffs to increase inflation by 0.5% this year. In his annual shareholder letter on Monday, he sounded a note of caution about a possible recession: "Whether or not the menu of tariffs causes a recession remains in question, but it will slow down growth. " 

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More Than Just Economic Fears

JPMorgan has been revising some of its investment expectations in light of tariff-related stock market volatility. It downgraded steel, citing the U.S. auto industry, which relies on 25% of its steel being imported. However, Dimon said the tariffs could engender more than just economic concerns. 

“I really almost don’t care fundamentally about what the economy does next,” Dimon said in a letter to shareholders Friday after JPMorgan Chase reported earnings. “That isn’t that important. To keep the world safe and free, that is the most important thing.” 

“The China Issue”

Dimon said in his letter to shareholders that he only supports tariffs as they relate to national security, not the broader trade strategy that the government seems intent on pursuing with China. “The China issue is a major issue. I don’t know how that’s going to turn out… it’s a significant change we’ve never seen in our lives.”

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Relationship With Europe

When speaking to the Financial Times, Dimon addressed the U.S. relationship with Europe, telling the outlet, “I think the most important thing is that we don’t read a book in 40 years: How the West Was Lost.” He continued: “I think it’s one thing for any nation or the United States to say, ‘I think this is unfair around trade, around the cost of military—I think there’s some very good points. I think Europe knows that they need to spend more on their military, but that does not mean we shouldn’t have a military alliance with you.”

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