JPMorgan Chase & Co. Worried About Trump’s Trade Wars, Strategizing In Case Of ‘Major Miscalculation’
American multinational investment bank and financial services company JPMorgan Chase & Co. is worried about the trade wars President Trump continues to escalate with various countries — mostly China — and is starting to make forecast and strategy changes in the event of a “major miscalculation,” Fortune reports.
“U.S. economic and equity market resilience despite tariffs will embolden the president on all geopolitical fronts — autos, NAFTA and particularly Iran — and thus risk a major miscalculation from sanctions that are tough to calibrate,” JPMorgan Chase & Co. strategists warned.
Trump’s hardliner stances have already made an impact on the market, so the company has boosted oil-price forecasts, mostly due to the expected crude demand drop from Iran, which is about to get hit with Trump’s sanctions.
China remains JPMorgan’s biggest concern.
Deaf to largely bipartisan criticism, President Trump continues to defend his protectionist measures. On Thursday, for instance, he posted a short video message to his official Twitter page, lauding his administration’s accomplishments, and tying job growth to tariffs on Chinese goods.
Businesses have not been nearly as enthusiastic. Most recently, as the Inquisitr reported, Walmart issued out a stern warning to Trump, arguing that his tariffs on Chinese goods will not accomplish anything. They will, instead, force price hikes, hurt customers, and the American economy as a whole.
By writing a letter to U.S. Trade Representative Robert Lighthizer, Walmart joined hundreds of other American businesses that recently testified in hearings hosted by the Office of the U.S. Trade Representative, protesting Trump’s tariffs.
Trump's Overconfidence May Bring 'Major Miscalculation': JPMorgan https://t.co/GuFuWLKpem pic.twitter.com/5yqAxb4ytU
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“For U.S. equities, 25% tariffs on all imports from China could take $8 off consensus 2019 EPS projections of $179 and reduce next year’s EPS growth from 10% to 5% year-on-year. Even with a forward multiple of 17, an EPS downgrade this large would end the U.S. stock rally unless some other offset materialized,” JPMorgan warned.
Donald Trump’s tariffs are, according to USA Today, a tax on Americans, and things are about to get worse, since tariffs birth more tariffs and provoke retaliatory measures until trade wars further escalate.
American consumers, and American companies operating in China will suffer, and repercussions of Donald Trump’s protectionist measures will likely be felt all over the globe. According to USA Today, while Trump is displaying remarkable consistency when it comes to trade, he has not identified any tangible objectives.
It would therefore make more sense to impose targeted sanctions, while showing China a path to relief. This way Trump could put pressure on official Beijing, without turning Americans — American businesses and consumers — into collateral damage, USA Today concluded.
