Wall Street leaders warn of harsh economic consequences from Trump’s tariffs

Stocks swung wildly for a third consecutive day in response to the coming widespread U.S. tariffs, many of which are set to take effect on Wednesday. Now, some Wall Street leaders are warning that more economic pain could be ahead.

The business community has generally tried to avoid criticizing Trump in public and has welcomed his promises of lower taxes and deregulation. But the ongoing market sell-off appears to have loosened more tongues in the financial sector.

JPMorgan Chase CEO Jamie Dimon, who runs the largest U.S. bank and is one of the most powerful leaders on Wall Street, on Monday warned that the tariffs will raise prices, slow economic growth, and hurt the country’s global standing.

“The quicker this issue is resolved, the better because some of the negative effects increase cumulatively over time and would be hard to reverse,” Dimon wrote in his annual letter to shareholders. “In the short run, I see this as one large additional straw on the camel’s back.”

JPMorgan’s chief economist warned last week that the tariffs will tip the U.S. into a recession this year. Dimon on Monday didn’t go that far, writing that whether the tariffs cause a recession “remains in question.”

He noted that his “most serious concern is how this will affect America’s long-term economic alliances.”

Dimon is one of a few CEOs who had previously aired milder public concerns about Trump’s trade policy: “Uncertainty is not a good thing,” he told a conference last month.

Goldman Sachs on Monday raised its prediction for the likelihood of a recession from 35% to 45%.

Analysts for the investment bank attributed the upward revision to “a sharp tightening in financial conditions, foreign consumer boycotts, and a continued spike in policy uncertainty that is likely to depress capital spending by more than we had previously assumed.”

On Sunday evening, Trump was asked by reporters about the ongoing market sell-off and how much pain in the markets he’d be willing to tolerate.

“I think your question is so stupid. I mean, I don’t want anything to go down, but sometimes you have to take medicine to fix something,” he said.

Trump added that he thought inflation wouldn’t be much of an issue for people beginning back-to-school shopping in the late summer and early fall. “I don’t think inflation is going to be a big deal,” he said.

But even some of Trump’s vocal supporters on Wall Street have begun to sound the alarm.

In a lengthy thread posted to X on Sunday, billionaire hedge fund manager Bill Ackman called the tariffs an “economic nuclear war on every country in the world.”

Ackman, who endorsed Trump before the election last year, said the trade war will force consumers to stop spending money and cause investments to dry up — hurting small and medium-sized businesses in particular.

“Business is a confidence game,” he said. “The president is losing the confidence of business leaders around the globe.”

Ackman said Trump could instead “call a 90-day time out, negotiate and resolve unfair asymmetric tariff deals, and induce trillions of dollars of new investment in our country.”