Unlock the Editor’s Digest for free

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

JPMorgan Chase chief Jamie Dimon has warned that a global trade war risks tipping the US economy into a recession and driving prices higher, while undermining the country’s long-term alliances.

In his widely read annual letter to shareholders published on Monday, Dimon said the tariffs announced last week by US President Donald Trump “will likely increase inflation and are causing many to consider a greater probability of a recession”.

“The quicker this issue is resolved, the better because some of the negative effects increase cumulatively over time and would be hard to reverse,” Dimon wrote.

He said many uncertainties remained from the planned tariffs, including potential retaliation from other countries and their impact on business confidence, investments and capital flows.

“I am hoping that after negotiations, the long-term effect will have some positive benefits for the United States,” Dimon added. “My most serious concern is how this will affect America’s long-term economic alliances.”

The comments by Dimon, who has led JPMorgan since 2006 and is one of the most influential voices on Wall Street, reflect growing concern across corporate America about the potential economic harm that Trump’s tariffs could inflict. 

He said the tariffs would probably be inflationary in the US in the short term and added: “Whether or not the menu of tariffs causes a recession remains in question, but it will slow down growth.”

The US economy remained resilient despite an “unsettling landscape”, Dimon said, and businesses appeared healthy and consumers were still spending, though he observed some recent weakening.

Dimon, who in the past has described himself as a Democrat but whose views in recent years have diverged from the party, has been warning of growing geopolitical risks for more than a year.

He told shareholders in 2024 that Russia’s conflict with Ukraine and violence in the Middle East had created risks at a level not seen since the second world war.

While critical of the White House’s tariff plans, Dimon expressed support for its efforts to secure the country’s borders and said Republicans were right to champion business, limit excessive government intervention and “cut back on needless, mind-numbing, job-killing regulations”.

Global stocks tumbled on Monday, deepening a rout that wiped more than $5tn from US equities on Thursday and Friday.