Jamie Dimon, the chief executive of JPMorgan Chase, has warned Donald Trump that imposing tariffs on additional Chinese goods would inflict damage to the US economy, as the US president faces a decision within days on whether to impose new levies on Beijing.
Speaking at the headquarters of the Business Roundtable, a lobbying group for corporate America in Washington, Dimon said that while the direct impact of tariffs was small, the indirect effect could be substantial.
"It's what happens to people's psyche and confidence and businesses," Dimon said. "[The tariffs] wouldn't be a positive."
Dimon's comments came at the latest critical juncture in the trade war between the US and China. Trump must decide by Sunday whether to move ahead with planned tariffs on US$156 billion ($236.9b) of Chinese imports — including consumer goods like toys and smartphones.
Although some Trump administration officials have signalled that a delay in the levies is possible, no firm decision has been announced by the president or his trade team. Joshua Bolten, the chief executive of the Business Roundtable and former White House chief of staff under George W Bush, said his group had received "no assurance" from the administration that the tariffs would be delayed.
"There's no question that the imposition of additional tariffs on December 15 will have a dampening effect on economic activity and a further dampening effect on CEO optimism," he said.
The BRT on Wednesday released the results of its quarterly survey of sentiment among top US executives, which showed the seventh consecutive quarterly decline, partly on the back of uncertainty over US trade policy.
AdvertisementAdvertise with NZME.
Corporate America has greeted an agreement between Trump and congressional Democrats this week to allow a vote on the USMCA, a deal revamping the 25-year old Nafta trade with Canada and Mexico, with relief. The BRT said it would "enthusiastically support" approval in Congress, which is expected in the coming weeks.
However, the group warned that it should not be seen as a template for future US trade agreements after changes proposed by Democrats on Capitol Hill caused concern among some businesses.
Among them was the removal of intellectual property protections for drug companies and strict enforcement of labour standards in Mexico, through a tight monitoring scheme of facilities and supply chains south of the border.
Dimon said he was still expecting the US and China to reach a "phase one" deal to pause their trade war, but lamented that it would be difficult to move towards a more comprehensive agreement with Beijing. It was too early to say whether Trump's strategy of high pressure on Beijing was effective or had failed to force meaningful concession, he added, and encouraged the US president not to throw in the towel.
"If you were running the American government, you wouldn't say: 'I'm going to give in, you'd say we have to fix this, we cannot go on any longer, whatever the economic cost is," Dimon said.
Written by: James Politi
© Financial Times