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Why Is Jamie Dimon Supporting Trump on Tariff Threats?


May. 8 2019, Published 2:51 p.m. ET

Jamie Dimon on Trump’s tariff threats

During his latest interview with CCN, Jamie Dimon, chair and CEO of JPMorgan Chase (JPM), said that regardless of the market’s reaction to President Donald Trump’s aggressive stance on tariffs, the threats might actually be working, as he’s succeeded in bringing China (FXI) to the negotiating table.

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Trump’s tariff threats and the market

Over the weekend, President Trump announced that $200 billion worth of goods from China would attract a 25% tariff on May 10. Currently, the goods attract a 10% tariff. He also threatened to impose a 25% tariff on the remaining imports from China. On May 7, after the further reiteration of these threats by President Trump’s aides, the markets fell sharply. The S&P 500 Index (SPY), the Dow Jones Industrial Average Index (DIA), and the NASDAQ Composite Index (QQQ) fell 1.7%, 1.8%, and 1.9%, respectively.

Threats as a negotiating tactic

Dimon, however, believes that the market’s short-term reaction can’t be seen as a reliable judge of the situation. He said that while such tariffs might have a negative effect on the markets, the United States will be fine in the long term.

He said, “Tariffs increase the odds of a trade war, that’s all. I think if you had tariffs, you would see reactions in the marketplace that are not what either side wants.” He also believes that the threats are working as a negotiating tactic. He still sees an 80% chance of the trade deal happening.


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