JPMorgan Chase & Co. CEO Jamie Dimon says the dollar's reserve currency status depends on a dominant US economy, and he is calling for Washington to secure trade deals with allies to protect it.
Dimon made the argument this week in a Bloomberg Tech interview with anchor David Westin and published a Wall Street Journal op-ed on Monday.
The Connection Between Economy and Currency
Dimon argued that both the best military and the dollar's reserve role depend on having the world's strongest economy. He pointed to the US geographic position between the Atlantic and Pacific oceans as a structural advantage.
He highlighted the scale of international capital flows, noting that foreign investors hold between $20 trillion and $30 trillion in the US, while American companies hold nearly equal amounts abroad.
Dimon cited 40 military alliances and 20 free trade agreements as evidence of US-led coordination. The Office of the US Trade Representative confirms free trade agreements in force with 20 countries.
Dimon's Trade Policy Pitch
While acknowledging that unfair treatment in trade should be addressed, Dimon prioritized completing trade deals. "My view is we should try to get these trade deals done," he told Bloomberg.
In his Wall Street Journal op-ed, Dimon proposed a sweeping US-Europe free-trade agreement conditional on European economic and military reforms. He suggested the pact could later extend to Canada, Mexico, Japan, South Korea, Australia, and the Philippines.
This approach contrasts with protectionist tariff policies pursued by the Trump administration.
Implications for Markets and Currency
For investors monitoring dollar strength and currency dynamics, Dimon's remarks tie the dollar's international standing directly to trade policy decisions. Whether the US administration shifts from tariffs toward new trade agreements will indicate whether Dimon's argument gains policy traction.
