New York
CNN
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Businesses around the world and mainstream economists are fretting about higher prices as President Donald Trump unveils his tariff-heavy economic strategy. But Jamie Dimon, CEO of the world’s largest bank, believes there may be too much worry and not enough faith in Trump’s plan.
Tariffs are “an economic tool” or “an economic weapon,” depending on how they are used, Dimon, the head of JPMorgan Chase, said in an interview Wednesday with CNBC from Davos, Switzerland, where the World Economic Forum is taking place. “I’ll put it into perspective: If it’s a little inflationary, but it’s good for national security, so be it. I mean, get over it.”
Currently, Trump is threatening a 10% blanket tariff on Chinese goods imported into the US and 25% tariffs on Mexican and Canadian goods, coming February 1.
However, Dimon said these threats can be used effectively to “bring people to the table” to negotiate more favorable trade terms. He believes the Trump administration is trying to use them that way.
That could mean the U.S. will impose lower tariffs on Mexico, Canada and China than the tariffs Trump has imposed — or perhaps no new tariffs at all. “We’ll find out,” Dimon said.
Similarly, Ngozi Okonjo-Iweala, director-general of the World Trade Organization, said it makes sense to see what happens before reacting.
“Can we calm down?” Okonjo-Iweala told CNN’s Richard Quest in Davos. “I think we should not get too excited about the tariff issue. Let’s wait and see what will actually be done. Right now there’s a lot of speculation about what might be done, it’s not done yet.”
Trump himself appears to be leaving the door open for negotiations by setting a deadline of February 1 instead of immediately imposing these new tariffs, which he previously promised he would do on his first day in office. The tariffs he is now discussing appear to be related to fentanyl, which Trump claims is coming into the US from China via Mexico and Canada.
Already, he said he spoke with Chinese President Xi Jinping about imposing tougher penalties on people who transport and manufacture fentanyl in China, Trump said at an Oval Office press conference on Tuesday.
In addition to the tariffs Trump has discussed since taking office earlier this week, during the campaign he imposed a 10% tariff on everything the US imports, as well as tariffs of up to 60% on Chinese goods. He also said he would ask countries that are part of BRICS – a group of major emerging economies including China and Russia – to commit to not creating new currency or face 100% tariffs while administering the his.
Many economists, including those at JPMorgan Chase, have predicted that the tariffs, combined with the mass deportations that Trump has pledged to implement, have the power to spur higher US inflation. However, there is some debate among economists as to whether the tariffs alone will cause a one-time price increase or whether consumers will come to expect higher prices in the future as a result of the tariffs, leading to potentially higher inflation.
The tariffs Trump said could be imminent could make a wide range of goods more expensive for Americans, especially since Mexico, China and Canada are the country’s top three trading partners.
This list includes consumer electronics such as phones, televisions and computers, toys, cars and car parts, petrol and products.
For example, $123 billion of the $246 billion worth of motor vehicles the U.S. imported last year through November came from Mexico, Canada and China. That’s a little more than half the value of all cars imported from the US.
The auto sector is likely to be “apoplectic” about the potential new tariffs, said Mary Lovely, a senior fellow at the Peterson Institute for International Economics. American car companies have been able to keep production costs low by hiring lower-wage workers, particularly in Mexico, where most of their production has been moved in recent years.
But that cost savings will essentially be erased if the potential new fees go into effect, she said.
Dimon says he and Musk ‘hugged it’
Dimon and Tesla CEO Elon Musk have had a rocky relationship since JPMorgan Chase filed a lawsuit against the electric vehicle maker four years ago seeking $162 million for what it claimed was a breach of contract related to warranties. Tesla stock.
This came after Musk posted in 2018 on what was then Twitter, “I’m thinking of taking Tesla private for $420. Funding secured.” That sent Tesla shares immediately jumping 10% that day.
In court, Musk testified in 2023 that “JPMorgan hates Tesla, in short.” JPMorgan has since dropped the lawsuit.
Now Dimon and Musk, who is heading Trump’s Department of Government Efficiency, are on better terms, Dimon said.
“Elon and I have embraced it,” Dimon said Wednesday. “He came to one of our conferences, he and I had a nice long conversation. We settled some of our differences.”
“The guy is our Einstein,” added the Chase CEO. “I would like to be of service to him and his companies as much as we can.”