Tariff Policies Could Push US Into Recession, Need To Bring 'Non-Aligned Nations' Like India Closer: JP Morgan CEO

In his annual letter to shareholders released Monday, Dimon emphasised the need for a more cooperative approach to trade, especially with countries like India and Brazil.

Even if a full-blown recession is avoided, CEO Jamie Dimon noted that growth could still take a hit.

Source : Freepik

JPMorgan Chase CEO Jamie Dimon voiced strong concerns over the potential fallout of US President Donald Trump's escalating tariff policies, warning that the measures could stoke inflation and push the American economy toward a downturn. 

In his annual letter to shareholders released Monday, Dimon emphasised the need for a more cooperative approach to trade, especially with countries like India and Brazil.

"The recent tariffs will likely increase inflation and are causing many to consider a greater probability of a recession," Dimon cautioned, adding that market valuations still remain relatively elevated. “These significant and somewhat unprecedented forces cause us to remain very cautious,” he wrote.

Even if a full-blown recession is avoided, Dimon noted that growth could still take a hit, reported NDTV. The current landscape, he explained, is defined by a mix of tailwinds from tax reform and deregulation, and headwinds such as trade tensions, persistent inflation, rising fiscal deficits, and heightened asset price volatility.

Domestic Prices Could Climb as Trade Pressures Build

According to Dimon, the inflationary effects of the new tariffs could be visible not only in imported goods but also in domestic prices, as rising input costs and shifting demand patterns ripple through the economy. “As for the short-term, we are likely to see inflationary outcomes, not only on imported goods but on domestic prices,” he said, pointing to supply-side disruptions.

Dimon also noted that the United States lacks key trade pacts with many of its long-standing partners. Rather than demanding alignment, he suggested the US pursue closer trade relations with “non-aligned” nations through goodwill and strategic investment. “We don’t need to ask many nonaligned nations, like India and Brazil, to align with us – but we can bring them closer to us by simply extending a friendly hand with trade and investment,” he said.

The United States has already raised import duties on Indian goods to 26 per cent and introduced 10 per cent tariffs on Brazilian exports.

Dimon was not the only high-profile figure to raise the alarm. Pershing Square CEO Bill Ackman echoed similar concerns, stating, “We are in the process of destroying confidence in our country as a trading partner, as a place to do business, and as a market to invest capital.”