J.P. Morgan Chase CEO Jamie Dimon says the United States can’t rule out stagflation, which describes the precarious combination of high inflation, rising unemployment and stagnant growth, as a result of the steep international tariffs imposed by President Donald Trump.
“I just think there’s a chance that … you’ll have stagflation,” Dimon said Thursday during an interview with Bloomberg at the lender’s annual Global China Summit. “I’m not saying it’s gonna happen, I don’t want the readers to say, ‘He’s predicting,’ I’m not.”
He continued, “But we have to be prepared for something like that.”
Trump announced a sweeping 10% baseline tariff on all U.S. imports last month, with levies on China set even higher, in what he has painted as a just crusade to revive American manufacturing, while economists have warned about a potential recession, or worse.
“I think that global fiscal deficits are inflationary,” Dimon said Thursday. “I think the militarization of the world is inflationary. The restructuring of trade is inflationary — and this is not all an American thing — and the infrastructure needs are inflationary.”
He went on to warn, “You may be surprised” by the results, and this isn’t the first time he’s criticized Trump’s tariffs. Dimon told Fox Business last month that he believes a recession is “a likely outcome” of the controversial policy.
Trump, who appeared to focus solely on Dimon’s additional remark at the time that trade partners would be wise to calmly “negotiate some trade deals,” told a reporter after the interview that Dimon “understood” his tariffs and is “very smart and very genius, financially.”
Trump continued at the time, “He’s done a fantastic job at the bank, and he knows that.”
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While markets fluctuated following Trump’s announcement in April and even some Republicans have criticized the tariffs, he pushed forward Friday and floated a 50% tariff on the European Union and 25% penalties on Apple if iPhones aren’t made in the U.S.
Dimon noted Thursday that the U.S. economy is doing “well,” but didn’t waver from the realities of Trump’s trade war. He said the country has “effectively been in a soft landing” compared to what many analysts feared could be a disaster, concluding, “That does not tell you what the future’s going to be.”
