Key Points

In his annual letter to shareholders, Dimon said the recent wave of tariffs "will likely increase inflation and are causing many to consider a greater probability of a recession." While he stopped short of predicting an outright downturn, he acknowledged the tariffs could have a dampening effect on economic momentum.

"Whether or not the menu of tariffs causes a recession remains in question, but it will slow down growth," he wrote.

Dimon emphasised that the strength of the United States on the world stage relies on a combination of economic vitality, military power, and moral leadership. He warned that this foundation is now under threat from Trump's trade policies and broader "America First" foreign policy approach.

"America First is fine, as long as it doesn't end up being America alone," Dimon said. He cautioned that fragmentation of Western alliances--both military and economic--could eventually weaken the US itself.

Further stressing the interconnected nature of trade and security, Dimon added: "It is extremely important to recognise that security and economics are interconnected - 'economic' warfare has caused military warfare in the past."

His remarks suggested that economic isolationism could not be viewed separately from geopolitical consequences, reported CNN.

Though Dimon has previously warned about global instability--particularly related to the wars in Ukraine and the Middle East--this year's letter marked a notable shift in tone towards US domestic policy.

Until now, he had largely avoided direct criticism of Trump's tariffs, suggesting in January that if they helped manufacturing and led to minor inflation, people should "get over it." But with Trump's trade measures expanding significantly, Dimon's stance appears to have hardened.

Even amid recent market volatility, Dimon warned that a deeper correction could still lie ahead. "Even with the recent decline in market values, prices remain relatively high," he wrote. He said this, along with the unusual confluence of global risks, was reason enough to remain "very cautious."

While the US economy had remained "resilient" until recently, with consumer spending and business activity holding steady, Dimon noted signs of weakening, CNN reported.

He concluded his message by highlighting the broader gravity of the moment: "We face the most perilous and complicated geopolitical and economic environment since World War II."

- ANI