JPMorgan Chase (JPM) CEO Jamie Dimon said that while he doesn’t always see eye-to-eye with President Donald Trump, they do seem to share the same ultimate goals for global trade.
“On trade, we have a different opinion. I think we want the same outcome,” Dimon said. “He has a different way of going about it.”
Dimon’s comments come days after the Trump administration announced tariffs on $50 billion worth of imported Chinese goods. China retaliated announcing tariffs on $50 billion worth of imported U.S. goods.
In his widely-read annual letter to shareholders, Dimon notes that since it joined the WTO in 2001, China has experienced “significant economic and employment gains,” yet has not opened up its economy as fast as expected.
“Now, more than 16 years later, it has the second-largest economy in the world and is home to 20% of the Fortune 500 companies, yet it still considers itself a ‘developing’ nation that should not be subject to the same WTO standards as the United States and other ‘developed’ countries,” he said.
Dimon points the finger at international institutions for failing in their role.
“The international system provides agreed-upon rules of the road — and mechanisms for enforcing them. It serves as the basis upon which we can insist on fairer trade practices from competitors and adequate burden-sharing from allies,” he wrote.
However, the system was “ultimately fallible.”
“NATO has become less effective, serious issues surround trade and the WTO is unprepared to deal with today’s issues — and too bureaucratic and slow to fix them.”
In an interview with Yahoo Finance’s editor-in-chief Andy Serwer, Dimon said that as a result, even though they were not on the same page in terms of strategy, on global trade both he and Trump “want the same outcome.”
In his letter, he said that his best-case scenarios would be as follows:
- The United States should define very clearly, and in detail, what it wants from China.
- The United States should lay out a distinct timeline — and determine what the reaction would be if it is not met.
- The United States should listen closely to China about any legitimate complaints it may have.
- This should be done in partnership with our largest allies, particularly Japan and Europe.
- The United States should revisit the Trans-Pacific Partnership and fix the parts considered unfair. The TPP could be an excellent economic and strategic agreement between America and its allies, particularly Asia. This is not against China: The country could at some point be offered the opportunity to enter the TPP if it demonstrates a willingness to meet its standards, which would improve upon the rules-based global trading system under American leadership.
A ‘mutually beneficial relationship with China was ‘possible and preferable’ to Dimon.
Dimon also added a caveat in the note: there was always “a chance that miscalculations on the part of the various actors could lead to negative outcomes.”
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