"Misunderstanding Value-Added Tax...
It Needs to Be Clarified"
Jamie Dimon, Chairman of JP Morgan, warned that the possibility of a U.S. economic recession due to tariff policies is high.
On the 9th (local time), in an interview with Fox Business, Dimon was asked if he personally expects a recession. He replied, "For now, I will follow the economists' opinions, but I think it is very likely."
On the same day, President Trump announced a 90-day suspension of reciprocal tariffs on all countries except China, causing the U.S. stock market to rebound, but the dispute between the world's largest economies is intensifying day by day. After President Trump imposed a 104% tariff on Chinese imports, China retaliated with an 84% tariff.
Dimon mentioned the Dow Jones index decline due to the tariff impact, saying, "(In such a case) it feels like losing money in 401(k) retirement plans and that pension assets are shrinking," adding, "Ultimately, people have no choice but to reduce spending."
Dimon diagnosed that the economic situation was not good even before the presidential election, but the outlook worsened due to tariffs. He pointed out rising geopolitical tensions, massive fiscal deficits in the U.S. and others, and entrenched inflation, predicting that these conditions will not disappear easily.
Dimon said, "I am calm, but if there is no progress on this front, the situation will worsen." He added, "It is reasonable to say that trade is unfair. There are indeed unfair trade elements," but also said, "They misunderstand value-added tax. To facilitate negotiations more smoothly, a clearer understanding of this part is necessary."
President Trump has repeatedly expressed dissatisfaction with the European Union (EU) and others, citing value-added tax as a representative non-tariff barrier.
Dimon said tariffs have exceeded what people expected, forecasting, "This will cause some inflation and slower growth." He continued, "I hope Scott Vestin, the Treasury Secretary who is an expert in this field, will step in for negotiations," and said, "If you want to calm the market and see progress, give Scott some time."
He added, "This kind of issue will affect stock prices again. It is not over yet," and said, "Let them calm down, take a deep breath, and then conduct trade negotiations."
Dimon stated, "Economic security and national security are almost directly related in the long term," and said, "I think dividing the Western world aligns with the interests of Russia, North Korea, Iran, and China. I believe that will be the biggest mistake in the long run." He added, "However, I think resolving tariff and trade issues is a good thing," and said, "If that happens, one major uncertainty will disappear."
Dimon had earlier urged a swift resolution of uncertainties related to tariffs in his annual shareholder letter released on the 7th. At that time, he expressed concerns that tariffs would raise prices and plunge the global economy into a recession.
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