JPMorgan has lost business due to tariffs, CEO Dimon says

JPMorganChase CEO Jamie Dimon said Monday that the bank has lost international business recently, as certain clients have retreated from working with American banks in the wake of roller-coaster tariff policies.

Some international clients have moved from JPMorgan to banks based in Europe and Canada, but not because they’re dissatisfied or upset with the American bank, Dimon said during an Investor Day presentation.

“We’ve lost business because of that,” Dimon said. “It’s not that big. It’s not that significant. … I do expect there’ll be some of that if this trade war gets worse, but it’s not going to change our plans.”

Even though the Trump administration’s more extreme tariff policies have been put on pause, JPMorgan is still planning for possible stress, since the trade war’s final resolution remains uncertain. Dimon said that even at their current levels, tariffs are stirring up risks to the economy.

Dimon added that he believes the market is underestimating the potential effects of geopolitical risk. The worst-case outcome for a bank is so-called stagflation, when the economy gets hit by a recession and inflation simultaneously, he said.

The JPMorgan CEO said he thinks the chances of stagflation, which reared its head in the 1970s, are roughly two times what the market predicts. If there is a recession, Dimon is predicting that credit losses will be worse than most estimates.

Still, Dimon said his own bank would be fine.

The nation’s largest bank maintained its net interest income guidance for the year at $90 billion, and it’s hopeful about beating that forecast, Chief Financial Officer Jeremy Barnum said Monday.

Some of the headwinds JPMorgan outlined a month ago “are now tailwinds,” according to Barnum. The bank stopped short of upping its prediction for net interest income due to the continued volatility of the yield curve, he said.

Although the bank is optimistic about its 2025 performance, its management team still emphasized risks during their remarks Monday.

“The evolving tariff environment, combined with the preexisting geopolitical tensions, adds significant uncertainty into the economic outlook,” Barnum said. “And the combination of inflation and large fiscal deficits may constrain the available policy responses in ways that further increase the risk.”

Depending on the severity of tariff policies, JPMorgan could see “a notable increase” in its reserves for losses across its commercial and industrial loan portfolio, Barnum said.

JPMorgan’s reserves against its C&I loan book were $5 billion as of the first quarter. The automotive, industrial and consumer and retail sectors are more sensitive to tariffs, Barnum said Monday.

If the economy falls into a moderate recession, JPMorgan estimates that it would build its own reserves by less than $3 billion, according to Barnum.

That scenario models for the U.S. unemployment rate peaking at 6.5% in the second quarter of next year, up from its latest 4.2%; the Federal Reserve cutting interest rates to 2% by the third quarter of 2026, down from the current target range between 4.25% and 4.5%; and a 1.7% GDP decline.

JPMorgan built its reserves by $2 billion in 2024. In the first quarter, the bank’s total allowance for credit losses grew by $1 billion to $27.6 billion.

“Tariffs remain relevant,” Barnum said. “Still, even those scenarios would be manageable for us. Most importantly, no matter the outcome here, we are committed to serving our clients through any environment and feel well positioned to do so.”

Barnum added that part of his confidence about the bank’s resilience stems from its capital position.

TD Securities analyst Steven Alexopoulos wrote in a note Monday that the more-detailed credit quality outlook paints a picture of strength for JPMorgan.

On Friday, Moody’s cut the United States’ credit rating by one step below its prior AAA status. Moody’s was the last of the “big three” credit rating agencies to downgrade the country from the highest possible mark.

Dimon said Monday that he still thinks the U.S. has the world’s best financial market, despite some probable pain to come.

“I do believe in American exceptionalism,” Dimon said. “I’m a patriot. … I never believed it was [as] exceptional as people were saying. I never believed that Europe was as bad as people were saying.”