Dimon warns of economic impact of trade war, sees possible recession

NEW YORK – JPMorgan Chase CEO Jamie Dimon on Monday warned that trade wars could have lasting negative consequences, days after he and other US bank CEOs met with Commerce Secretary Howard Lutnick to discuss the administration’s sweeping tariffs.

“The economy is facing considerable turbulence,” Dimon wrote. “We are likely to see inflationary outcomes … Whether or not the menu of tariffs causes a recession remains in question, but it will slow down growth.”

Dimon’s annual letter to shareholders followed a rout last week that wiped trillions of dollars off global stock markets in the wake of President Donald Trump’s new tariffs.

Dimon and other bank chiefs met with Lutnick in Washington on Thursday, a day after the tariffs were announced, to discuss the levies and ask questions, a source familiar with the meeting said.

The session was hosted by the Financial Services Forum, an industry lobby group, an administration official and the lobby group confirmed.

Dimon, 69, is one of the most prominent voices in corporate America and has regularly been consulted by administrations during times of crisis. His name was floated for senior economic roles in government during the 2024 presidential campaign, including Treasury secretary, but he stayed put at the bank.

Other Wall Street leaders also raised alarm as markets slumped. BlackRock CEO Larry Fink said on Monday stocks could extend their decline by 20%, noting views among his peers that the US economy is probably already in a recession.

Billionaire fund manager Bill Ackman, who supported Trump in his presidential bid, said the tariffs could lead to an “economic nuclear winter,” while hedge fund founder Boaz Weinstein told Bloomberg an economic “avalanche” has just begun.

Ackman urged the president to pause the tariffs while renegotiating trade deals. He said on X the tariffs would stymie business investment and consumer spending and “severely damage” the United States’ reputation for years, he wrote.

Credit spreads could easily widen as economic uncertainty potentially leads to a severe recession, Weinstein said. “I’m very concerned about a crash,” he said.

Investor Stanley Druckenmiller said in a post on X that he did not support tariffs exceeding 10%. Hedge fund manager James Chanos said, “This escalation threat is a very big deal,” after Trump said the US could impose more tariffs on China.

JPMorgan’s economists raised the risk of a US and global recession this year to 60% from 40% after Trump unveiled the trade barriers.

“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 the risks from the tariffs and trade war included persistent inflation and high fiscal deficits. He also saw risks of damaging economic confidence, investments, capital flows, corporate profits and the dollar.

Separately, major bank CEOs including Dimon and Bank of America CEO Brian Moynihan held a call on Sunday to discuss the tariffs, sources familiar with the matter said. The call was convened by the Bank Policy Institute, an association representing large US lenders, they said.

JPMorgan will report its first-quarter results on Friday. It earned a record annual profit last year.

Dimon warned that expectations the US will avoid slipping into recession could be derailed.

“Markets still seem to be pricing assets with the assumption that we will continue to have a fairly soft landing. I am not so sure,” Dimon wrote.

(Reporting by Nupur Anand in New York and Pete Schroeder in Washington, additional reporting from Svea Herbst-Bayliss, Tatiana Bautzer, and Ross Kerber; Editing by Lananh Nguyen, Himani Sarkar, Chizu Nomiyama, Kevin Liffey, and Cynthia Osterman)