JPMorgan Chase chief executive officer Jamie Dimon said on Wednesday, January 22, that the expected implementation of the tightening of Washington’s tariff policy planned by President of the United States Donald Trump, which will affect, among other things, US allies, can be described as a positive factor.
The head of the mentioned financial institution, which is the largest in terms of assets in the banking sector of the United States, during a conversation with media representatives at the World Economic Forum in Davos, Switzerland, stated that if properly used, the duties announced by Mr. Trump can protect the interests of the country. Also, in his opinion, the implementation of appropriate measures may contribute to bringing Washington’s trade allies back to the negotiating table. In this context, he noted that the relevant process may result in the conclusion of deals that are more beneficial to the United States.
It is worth noting that the statements of the head of the largest US bank significantly contrast with the fears of many economists and analysts who argue that Washington’s tightening tariff policy is likely to provoke a global trade war. Also, those who perceive the mentioned initiative of Donald Trump through the prism of expectations of negative consequences, assume that the materialization of appropriate measures will cause an acceleration of inflation in the United States.
Jamie Dimon, during a conversation with media representatives in Davos, said that he agrees with the implementation of a scenario in which the tightening of tariff policy would be a little inflationary, but at the same time positive for national security. He means get over it. Also in this context, the head of JPMorgan Chase underlined that national security trumps a little bit more inflation.
It is worth noting that after his inauguration on Monday, January 20, Donald Trump has already made statements indicating his intention to implement the tariff threat repeatedly declared during the election campaign. On the day of the inauguration, he confirmed plans to impose levies on goods imported from Mexico and Canada. Last Tuesday, January 21, the tariff threat was mentioned as an expected measure against products shipped from China and the European Union.
During a conversation with media representatives, Donald Trump said that the EU is treating the United States very, very badly due to its large annual trade surplus. The US last year ran a $214 billion deficit with the EU through November 2024.
Donald Trump has already announced his intentions to impose 25% tariffs on goods imported from Mexico and Canada. As for shipments of products from China, in this case, the mentioned figure is planned at the 10% mark.
Moreover, Washington is expected to review the trilateral trade agreement between the United States, Canada, and Mexico, which concluded during the first presidential term of Donald Trump. This agreement is up for review in July next year.
Jamie Dimon, commenting on the expected tightening of Washington’s tariff policy, did not go into details of Donald Trump’s corresponding plan. It is worth mentioning that Mr. Trump announced that 25% tariffs on goods imported from Mexico and Canada will take effect on February 1. Some experts suggest that this prospect can be used by Washington primarily as a means of negotiating with Mexico City and Ottawa, rather than as a tool for the direct implementation of trade policy.
Jamie Dimon described tariffs as an economic weapon and as an economic tool, noting that in the relevant case, much depends on how such measures are used. He underlined that tariffs can be inflationary and not inflationary.
During his first presidential term, which lasted from 2017 to 2021, Donald Trump leveled broad-based tariffs. Inflation in the United States did not exceed 2.5% in the mentioned years. It is worth noting that in some cases, Donald Trump significantly tightened his tariff policy during his first term as president. In this context, the trade war between the United States and China in the mentioned period is an illustrative example.
Jamie Dimon said that tightening tariff policy could change the dollar, but the most important thing is economic growth.
It is worth noting that Mr. Dimon is not the only big Wall Street chief executive officer who positively characterizes the intentions of the President of the United States regarding levies concerning imported goods. Goldman Sachs CEO David Solomon also said during a conversation with media representatives in Davos that business leaders are preparing for shifts in policy, including trade issues. In his opinion, the tariff factor will eventually turn into a rebalancing of some trade agreements. He also suggests that rebalancing can be constructive for the growth of the United States economy if it is handled right. According to him, in this case, the question is how quickly, and how thoughtfully all the mentioned will be done. He also noted that when used appropriately, it can be constructive. In his opinion, this is going to unfold over the year, and it needs to be watched closely.
During a conversation with media representatives in Davos, Jamie Dimon also stated that the US stock market is inflated. Moreover, It was noted that he felt more cautious than others in the business world due to risks, including, among others, deficit spending, inflation, and geopolitical upheaval.
Jamie Dimon stated that asset prices are kind of inflated, by any measure, adding that they are in the top 10% or 15% of historical valuations. The head of JPMorgan Chase clarified that his statements relate specifically to the American stock market, which is in the middle of a multiyear bull run.
In 2023 and 2024, the S&P 500 demonstrated annual growth of more than 20%. It is worth noting that the corresponding dynamic was recorded for the first time in the last 25 years. Last year, Jamie Dimon even called JPMorgan Chase shares expensive. During a conversation with media representatives in Davos, the head of the largest bank in the United States said that some segments of the bond market, such as sovereign debt, are at an all-time high. He noted that these indicators are elevated, and it is necessary to have fairly good outcomes to justify those prices. According to him, having pro-growth strategies helps make that happen, but there are negatives out there, and they can tend to surprise.
David Solomon acknowledged that stock market valuations were high. He noted that these figures can be justified by enthusiasm for both the impact of artificial intelligence and the expected moves by the Donald Trump administration to relax regulation for US companies. According to him, it is difficult to dispute the fact that equity multiples are high. He stated that the markets are looking forward.
David Solomon noted that if Donald Trump’s administration officials allow more mergers, which will increase activity in the capital markets, the gross domestic product (GDP) of the United States could grow by half a percent.
It is worth noting that Jamie Dimon built JPMorgan Chase into the largest bank in the United States by many measures, including assets and market valuation. Since 2022, he has consistently made statements that a hurricane is coming to the US economy. It is worth noting that this storm is still a theoretically possible scenario, but it has not yet transformed into the order of things materialized in the space of the economic system of the United States. In recent years, the US economy has demonstrated a resilience that has exceeded preliminary expectations. The victory of Donald Trump in the United States presidential election in November has generally generated optimistic expectations about the future relevant prospects. Mr. Trump’s administration is focused on ensuring economic growth. At the same time, many analysts perceive the tariff threat as a source of potential negative circumstances not only for foreign countries but also for the United States. For this reason, there is still uncertainty about the prospects for the US economy at the forecast level.
Jamie Dimon continues to take a cautious approach in the context of expectations regarding the future dynamic of the economic system of the United States. The head of the largest US financial institution is worried about deficit spending. Jamie Dimon said that this problem concerns not only the United States but is also relevant on a global level. He is also not so sure that inflation will go away.
Jamie Dimon has also repeatedly stated about the growing geopolitical risks. It is worth noting that this point of view fully corresponds to the present state of affairs in the space of what can be called the world’s reality. Currently, the tendency of a consistent increase in tension is observed in the area of geopolitical relationships. The interaction of world capitals is on a trajectory of gradual movement towards a kind of point of no return, after potentially crossing which the fundamental degradation of the system of international cooperation will begin. Confrontation between countries can provoke the realization of various risks. This state of affairs contains many negative factors for the economic prospects.
In the context of reflections on geopolitical risks, Jamie Dimon draws attention to armed conflicts in various regions of the world. Also in this case, he mentions the growing threats from China, the main geopolitical rival of the United States. Jamie Dimon is concerned about the impact the current global state of affairs will have on the world over the next 100 years. The head of JPMorgan Chase positively assesses Donald Trump’s intentions to tighten Washington’s tariff policy, although the implementation of the relevant plans is likely to provoke an increase in tensions in the international trade area, which will strengthen geopolitical escalation. At the same time, it is worth noting that in this case, the problem of possible configurations of the future is somewhat more complicated than a cause-and-effect relationship in an elementary format involving one autonomous action and its consequences that do not have a multilevel impact.
During a conversation with media representatives in Davos, Jamie Dimon also stated that he smoothed over a previously contentious relationship with Elon Musk. Moreover, the head of JPMorgan Chase, said there was no intention to run for office in 2028.
