JP Morgan’s Dimon urges US to make goals clear on global trade

Jamie Dimon, chairman and CEO of JPMorgan Chase & Co., said Thursday that the United States has entered a time of uncertainty in global trade and needs to make its goals clear, especially with China. 

In his annual letter to shareholders, the chairman of Business Roundtable urged the Trump administration to define what it wants from its economic relationship with Beijing as the two nations trade threats over massive tariffs.

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Dimon is urging President Trump to lay out a distinct timeline for China to make changes to its economic and trading policies while determining how the U.S. will react if those goals aren’t met.

“China has realized significant economic and employment gains since joining the [World Trade Organization] in 2001,” he wrote. “China was expected to continue on an aggressive path of opening up its economy, but this has happened at a much slower pace than most nations expected.”

Also, the United States should listen closely to China about any legitimate complaints has about trade, Dimon said.

Dimon said he believes that the the Chinese government “is competent and capable and it has done an extraordinarily good job of managing its emergence as the world’s second-largest economy.”

“I believe that they understand most of these issues and want to properly resolve them,” he said.

The U.S. slapped China and other nations with a 25 percent tariff on steel imports and 10 percent on aluminum. 

President Trump also has proposed tariffs targeting 1,300 Chinese products that U.S. officials argue were produced using intellectual property and forced technology transfer from American firms. 

China retaliated with $3 billion in tariffs on U.S. exports and another plan to hit 106 U.S. products with 25 percent tariffs on soybeans, cars and airplanes totaling about $50 billion.

“Recently, the United States threatened unilateral action against China,” Dimon said.

“Of course, anything that starts to resemble a trade war creates risk and uncertainty to the global economic system.”

He urged U.S. official to work in partnership with the nation’s largest allies, particularly Japan and Europe.

“The United States should revisit the Trans-Pacific Partnership and fix the parts considered unfair,” he said.

He said the Trans-Pacific Partnership, which was signed in March but the other 11 nations, “could be an excellent economic and strategic agreement between America and its allies, particularly Asia.”

Trump withdrew from the Trans-Pacific Partnership shortly after moving into the White House. 

Dimon said that China could at some point be offered a spot in the Trans-Pacific Partnership if “it demonstrates a willingness to meet its standards, which would improve upon the rules-based global trading system under American leadership.”

He argued that the United States needs to acknowledge many of the legitimate complaints around trade that include tariff and non-tariff barriers, intellectual property theft and other hurdles that make it more difficult for U.S. businesses to get equal access to some foreign markets. 

“When the U.S. administration talks about “free” and “fair,” it essentially means the same on all counts,” he said. “This is not what has existed. It is not unreasonable for the United States to press ahead for more equivalency.”

While the tariffs debate is ongoing and the U.S. continues to work toward a final updated agreement on NAFTA, Dimon said that there are always worries that there could be negative consequences in key trading partnerships. 

“While the chance of having an improved trade deal with both Mexico and Canada, as well as a more mutually beneficial relationship with China is possible and preferable, there is always a chance that miscalculations on the part of the various actors could lead to negative outcomes,” he said.

“This obviously creates higher risk and more uncertainty until resolved.”