Written by: Long Yue, Wall Street Insight
The head of global financial giant JPMorgan has issued a stern warning to Europe.
Recently, JPMorgan CEO Jamie Dimon warned European leaders about competitiveness issues, stating that Europe is currently "failing" in its competition with the United States and China. According to the Financial Times, Dimon said at an event organized by the Irish Foreign Ministry, "Europe's total GDP as a percentage of US GDP has dropped from 90% to 65% in 10 to 15 years, which is not good news".
One of the most influential voices in the global financial world also warned that financial markets are too relaxed about Trump's repeated threats of tariffs. Dimon said there is a "market complacency" and that investors are wrongly ignoring the potential impact of trade tensions.
Tariff Threats Underestimated
On trade policy, Dimon criticized the market's overly calm response to Trump's tariff threats. According to CCTV News, Trump previously threatened that tariffs on the EU would rise to 50% if no agreement was reached. Currently, the US tariffs on EU steel and aluminum have been raised from 25% to 50%.
However, investors have reacted tepidly to this threat. Dimon acknowledged that Trump has a "TACO" behavior (that is, "Trump Always Caves Out"), but he believes Trump has his reasons for doing so, and Europe and investors should not underestimate the US government's tariff policy.
Because Dimon believes that if the US economy weakens, Trump will face difficulties. He said:
I don't like using the term "Taco deal" because I think his retreat is the right move... I think if the US economy shows any weakness, he will encounter difficulties.
European Competitiveness Alarm
At the same time, Dimon's warning about the European economic outlook is more direct than before. He said that the competitiveness of the European market is declining, and there are fewer and fewer successful large companies.
We have a huge strong market, our companies are large and successful, with global scale... but this is becoming less and less the case.
This statement is more severe than Dimon's remarks at the annual shareholders' meeting in April this year. At that time, he said that "Europe has some serious problems that need to be solved" and urged European countries to carry out radical economic reforms to achieve growth.
Dimon also commented on the political landscape. Having led JPMorgan since 2006, Dimon said that although he has no political ambitions, he "might consider" participating in politics if certain political changes occur.
