In his annual letter to shareholders issued today, the CEO of JPMorgan Chase, Jamie Dimon, voiced his concerns regarding the potential economic ramifications of President Donald Trump’s recent tariff policies.
Dimon warned that these tariffs could worsen inflation and hinder economic expansion. He stressed the need for a swift resolution to trade uncertainties to avert long-term harm to consumer confidence and corporate profits.
“In the short term, we are likely to experience inflationary effects not only on imported goods but also on domestic prices, as input costs rise and demand for domestic products increases,” Dimon wrote regarding the tariffs.
The newly initiated “reciprocal” tariffs impose a baseline 10% tax on all imports, triggering notable market volatility. U.S. stock futures saw sharp declines, with the Dow Jones Industrial Average plunging by approximately 800 points.
This downturn reverberated worldwide, impacting markets in Europe and Asia.
Risk of recession
Dimon pointed out that the U.S. economy was already showing signs of deceleration before these tariffs were announced, and the additional pressures could exacerbate existing issues, potentially steering the country toward a recession.
He noted that the adverse effects — including lower consumer confidence, decreased investment, reduced corporate profits, and a weakened U.S. dollar — can accumulate and be increasingly challenging to reverse.
In addressing broader geopolitical issues, Dimon warned against adopting an isolationist approach. He emphasized that “America First” should not transform into “America alone.” He highlighted the necessity of preserving strong military and economic alliances, cautioning that fragmentation could weaken the U.S. and aid its rivals.
Dimon advocated for steady, respectful collaboration with allies and global partners to effectively compete with nations such as China, particularly in sectors like artificial intelligence and semiconductor technology.
Influence on cryptocurrency
The cryptocurrency market has not escaped the effects of these developments. For example, Bitcoin (BTC) plummeted to its lowest level since November, trading at about $78,500 at the time of writing.
This decline has triggered a domino effect on cryptocurrency-related stocks, causing significant losses for companies like MicroStrategy, Marathon Digital, Riot Platforms, and Coinbase.
Dimon’s skepticism regarding cryptocurrencies is well-known. He has previously questioned the concrete advantages of crypto assets, remarking that despite more than a decade of discourse, they have yet to provide substantial value.
While he recognizes the potential of blockchain technology, Dimon has consistently expressed doubts about the feasibility of cryptocurrencies themselves.