Jamie Dimon says US should strengthen allies economically, in veiled criticism of Trump | US economy

The head of the largest US bank has urged the White House to economically strengthen Washington’s allies in order to “avoid truly harmful consequences”, in his latest intervention in an increasingly tense relationship with the Trump administration.

As the Middle East conflict sparked by U.S. and Israeli attacks on Iran enters its sixth week, JP Morgan Chase Chairman and CEO Jamie Dimon said in his annual letter to shareholders that good U.S. foreign policy should put America first “but not alone.”

His remarks certainly appear to be seen as critical of Donald Trump, who announced in January that he was suing the banker and Wall Street institution for at least $5bn (£3.8bn) after accusing them of debanking him.

The comments also come five days after Trump called on governments to “go get their own oil” by force in the Gulf, as transatlantic relations have further deteriorated due to soaring energy prices resulting from the war.

Some economists have warned that a prolonged conflict could push oil prices above $170 a barrel, triggering a global recession.

Dimon wrote: “The economic weakening of the world’s democracies or the fragmentation of their economic ties could have truly harmful consequences. This is precisely what some of our adversaries and many autocratic nations want – it is their stated goal.”

“They would like to see all of our allies much less dependent on the United States and therefore much more dependent on them. In this scenario, many countries would be forced to seek deeper economic ties with some possible bad actors – over time, they could become vassals of those countries and unable to avoid coercion from them.”

Dimon, a longtime Democrat, was seen as having a surprisingly close relationship with Trump during the president’s first term, with the banker apparently turning down an offer to lead the U.S. Treasury Department during that administration.

However, the Wall Street tycoon has since appeared increasingly at odds with the White House. Addressing speculation about his own presidential ambitions in 2018, Dimon said during a panel in New York: “I think I could beat Trump… because I’m as tough as him, I’m smarter than him… And by the way, this rich New Yorker actually earned his money. It wasn’t a gift from dad.”

Dimon’s annual letter to shareholders is a highly anticipated event on Wall Street, with the accompanying text and graphics spanning nearly 50 pages and containing more than 20,000 words.

Continuing his theme, the banker was also critical of Trump’s tariff regime, one of the president’s signature policies during his second term in which goods imported into the United States have been hit with increasing tariffs — even when they come from the country’s traditional allies and established trading partners.

“While the tariffs have certainly ‘brought people to the table’ and allowed us to begin to correct some of our past poor trade practices, we need to look at U.S. foreign economic policy holistically,” Dimon wrote. “Not only should our foreign economic policy help us grow as a nation, it should help other countries grow as well. »

The JP Morgan boss also warned of possible difficult scenarios for the global economy. “The problem – and this could happen in 2026 – would be that inflation is slowly increasing, instead of slowly decreasing,” he wrote, while joining many economists in warning that the conflict in the Middle East could be inflationary.

“Now, because of the war in Iran, we also face the risk of significant shocks to oil and commodity prices, as well as reshaping of global supply chains, which could lead to higher inflation and, ultimately, higher interest rates than markets currently expect. Continuing trade negotiations are exacerbating tense geopolitical issues. And high asset prices, which certainly look good in the short term, create additional risk if things go wrong.”

The banker, however, sees reason for optimism in the U.S. economy in general, saying he continues to “believe the American dream is alive,” while highlighting the threats and opportunities of artificial intelligence.

“I don’t think it’s an exaggeration to say that AI will cure certain cancers, create new composites [for uses in manufacturing] and reduce accidental deaths, among other positive outcomes. This will eventually reduce the working week in developed countries. And people will live longer and safer,” Dimon wrote.