JP Morgan’s general manager Jamie Dimon warned that it could be “difficult to reverse” the effect of Donald Trump’s prices, who, according to him, would increase prices and make a recession more likely.
The boss of the American bank told investors in his annual letter that there are “legitimate reasons” for the number of new taxes applied to goods imported into the United States, there could be serious consequences if the prices were maintained for too long.
“There are many uncertainties surrounding the new pricing policy: potential reprisal actions, including on services, by other countries, the effect on trust, the impact on investments and capital flows, the effect on business profits and the possible effect on the US dollar,” said Dimon.
“Recent prices will probably increase inflation and make sure that many are considering a greater probability of recession.”
The world’s stock market markets underwent their third consecutive day in reaction to Trump’s radical rates on Monday, which sparked fears of a world trade war and a slowdown in economic growth – especially in the United States.
Dimon also said that prices were likely to dismantle American economic alliances around the world.
“I hope that after negotiations, the long-term effect will have positive advantages for the United States. My most serious concern is how it will affect America’s long-term economic alliances,” Dimon said.
Dimon has ceased to appoint individual countries, but warned that this type of “fragmentation” could play directly in the hands of the geopolitical rivals of the United States.
“If the military and economic alliances of the Western world were to be fragmented, America itself would inevitably weaken over time,” he added. He said it was “precisely what our opponents wanted”.
“The more quickly, this problem is solved, the better, because some negative effects increase cumulatively over time and would be difficult to reverse.”
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The boss of the bank recognized that the United States had the right to revise the trade agreements in cases where it was clearly “unjustly treated”.
However, he said, it was important to “recognize that we have sometimes treated others unfairly”, including thanks to the implementation of the law on the reduction of inflation in 2022, a large set of climate and health care expenses that favored American companies.
Dimon has also said that any new trade policy should be combined with a program that would help collect people, provide income assistance and move workers directly affected by trade.
“There are many ways to fight against unfair trade – industrial policy is one of them, but that should be done well or not at all,” said Dimon.
