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

The head of the US’s largest bank has pressed the White House to strengthen Washington’s allies economically in order to “avoid truly adverse consequences”, in the latest intervention in an increasingly testy relationship with the Trump administration.As the Middle East conflict sparked by US and Israeli attacks on Iran enters its sixth week, Jamie Dimon, the chair and chief executive of JP Morgan Chase, said in his annual letter to shareholders that good US foreign policy should put America first “though not alone”.His remarks appear certain to be viewed as critical of Donald Trump, who in January announced he was suing the banker and the Wall Street institution for at least $5bn (£3.8bn) after accusing them of debanking him.The comments also come five days after Trump told governments to “go get your own oil” by force from the Gulf, as transatlantic relations further soured over soaring energy prices as a result of the war.Some economists have warned that a prolonged conflict could drive oil prices above $170 a barrel, triggering a global recession.Dimon wrote: “Economic weakening of the world’s democracies or a fragmentation of their economic bonds could lead to truly adverse consequences. This is precisely what some of our adversaries and many autocratic nations want – it is their stated objective.“They would like to see all of our allies far less dependent on the United States and therefore far more dependent on them. In this scenario, many countries would be compelled to seek deeper economic bonds with some possible bad actors – over time, they could become vassals of these countries and unable to avoid coercion from them.”Dimon, a lifelong Democrat, was thought of as having a surprisingly close relationship with Trump during the president’s first term, with the banker reportedly turning down an offer to lead the US Treasury department during that administration.However, the Wall Street tycoon has since appeared increasingly at odds with the White House. Addressing speculation over his own presidential ambitions in 2018, Dimon told a panel in New York: “I think I could beat Trump … because I’m as tough as he is, I’m smarter than he is … And by the way, this wealthy New Yorker actually earned his money. It wasn’t a gift from Daddy.”Dimon’s annual letter to shareholders is a much-anticipated event on Wall Street, with the text and accompanying charts spanning almost 50 pages and containing more than 20,000 words.Maintaining his theme, the banker also appeared critical of Trump’s tariff regime, one of the president’s landmark policies during his second term, in which goods imported to the US have been hit with rising duties – even when they have originated from the country’s traditional allies and established trading partners.“While tariffs have certainly ‘brought people to the table’ and have allowed us to start to correct some of our past bad trade practices, we need to look at US foreign economic policy comprehensively,” Dimon wrote. “Not only should our foreign economic policy help us grow as a nation, but it should also help other countries grow.”The JP Morgan boss also warned of possible challenging scenarios for the global economy. “The skunk at the party – and it could happen in 2026 – would be inflation slowly going up, as opposed to slowly going down,” he wrote, as he joined numerous economists in warning that the conflict in the Middle East could be inflationary.“Now, because of the war in Iran, we additionally face the potential for significant ongoing oil and commodity price shocks, along with the reshaping of global supply chains, which may lead to stickier inflation and ultimately higher interest rates than markets currently expect. Continual trade negotiations exacerbate the tense geopolitical issues. And high asset prices, which certainly feel good in the short run, create additional risk if anything goes wrong.”The banker did see reasons for optimism in the general US economy, however, saying he continued “to believe the American Dream is alive”, as well as highlighting the threats and opportunities of artificial intelligence.“I do not think it is an exaggeration to say that AI will cure some cancers, create new composites [for uses in manufacturing] and reduce accidental deaths, among other positive outcomes. It will eventually reduce the work week in the developed world. And people will live longer and safer,” Dimon wrote.