Jamie Dimon warns Trump tariffs may 'backfire'

Global business leaders sound off on tariffs
Global business leaders sound off on tariffs

Jamie Dimon has a message for President Trump: Corporate America is worried about your trade agenda.

The JPMorgan Chase (JPM) boss warned on Tuesday that "one-off things" like Trump's tariff plans "tend to backfire."

Dimon is the chair of the Business Roundtable, a powerful lobby that represents major corporations. He said on a conference call with reporters that the group is "very concerned" that Trump's trade policy "will do more harm than good to the economy."

Dimon conceded he agrees with Trump that there are "some major issues around trade." But rather than imposing various tariffs, Dimon said "the right way to go about it is to think about it strategically with allies."

Last week, Trump detailed plans to impose tariffs of 25% on steel and 10% on aluminum, both aimed at reviving those industries in the United States. Major trading partners, including allies like the European Union, have threatened to retaliate. A wide range of businesses, from automakers to brewers, have expressed concern about higher prices.

Trade barriers are a "recipe for disaster and a cascading trade war," warned Joshua Bolten, CEO of the Business Roundtable CEO and a former chief of staff under President George W. Bush. He said these actions could cause an economic downturn in the United States.

The White House has pushed back against concerns of a trade war. Last week, Commerce Secretary Wilbur Ross said the tariffs will be implemented "without blowing up the world." And Trump softened his initial stance by exempting Canada and Mexico from the tariffs, at least for now.

Related: What is the WTO and how does it work?

The Business Roundtable staunchly defends free trade. Its member companies, which employ more than 16 million people, get about one-third of their sales from outside the United States.

Bolten said the group is deeply engaged with the administration on the tariffs and is "pressing hard to get those scaled back." He added, "we are hopeful the administration will listen."

CEOs are also paying close attention to Washington's attempt to renegotiate NAFTA, a trade deal with Canada and Mexico that is firmly ingrained in the way North American companies do business. Trump has repeatedly threatened to withdraw the United States from NAFTA, an outcome that Bolten said would be a "disaster" for American companies that export.

The Business Roundtable is concerned that Trump's increasingly aggressive stance on trade will drown out any economic benefits from the administration's efforts on taxes and deregulation.

Thanks in large part to Trump's business tax cuts, business leaders polled by the Business Roundtable last month were feeling extremely confident. The Business Roundtable's CEO Economic Outlook Index surged to the highest level since the survey began at the end of 2002.

The most recent survey, which was taken before Trump's tariff announcement, showed that CEO plans for hiring and capital investment also hit all-time highs. Expectations for 2018 economic growth were also higher.

The question now is whether Trump's toughening stance on trade will darken the outlook.

Bolten said "missteps" on trade threaten to "undermine" Trump's progress on taxes and deregulation, "perhaps even reverse it."

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