JP Morgan Advice Trump To Hold "Nations Like India" Close In His New Tariff War
New York: Chief executive officer at JPMorgan Chase & Co, Jamie Dimon, has asked US to develop closer ties with countries like India rather than asking them to align with US. He has warned that the recent tariff crack down announced by US President Donald Trump may spark inflation and lead the country to recession.
“The recent tariffs will likely increase inflation and are causing many to consider a greater probability of a recession,” he said. He also cautioned that the market valuations remain relatively high. “These significant and somewhat unprecedented forces cause us to remain very cautious,” he said on Monday.
Dimon said even if the tariffs don’t cause a recession, it will slow down growth. “The economy is facing considerable turbulence (including geopolitics), with the potential positives of tax reform and deregulation and the potential negatives of tariffs and “trade wars,” ongoing sticky inflation, high fiscal deficits, and still rather high asset prices and volatility”, Dimon added.
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He said that inflationary outcomes are to be the result of the tariff hikes in short term. It is likely to effect not only on “imported goods, but also on domestic prices as input costs rise and demand increases on domestic product,” he said, as quoted by media.
Pointing that US lacks trade agreements with some of its closest allies, he said that Washington could bring non-aligned nations like India closer by extending a friendly hand.
“Deepening high-standard trade with key trading partners is good economics and great geopolitics. We don’t need to ask many nonaligned nations, like India and Brazil, to align with us – but we can bring them closer to us by simply extending a friendly hand with trade and investment,” said Dimon.
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Trump administration increased duty on Indian imports to 26% and imposed 10% tariffs on products from Brazil.
Billionaire investor Bill Ackman warned that US “the process of destroying confidence in our country as a trading partner, as a place to do business, and as a market to invest capital”.
Trump also announced 50% additional tariffs on China on Monday, worsening its trade war after Beijing retaliated with 34% duties to his tariffs salvo. This effectively raises the total US tariffs on Chinese goods to 84%.
(With inputs from agencies)
