Last night Goldman Sachs boss warned that the threat of a trade war has “created material risks to the US and global economy” and called on Donald Trump to heed warnings from corporate America, writes Connie Riley.

David Solomon said “the prospect of a recession has increased” as he became the latest Wall Street figure to sound the alarm over the impact of tit-for-tat tariffs on business, households and investors.

“We are hopeful that feedback from companies, large and small, institutional investors and, ultimately, consumers will support an approach that will lead to greater economic certainty and long-term growth,” he added.

The comments came as Solomon warned his firm faces a “markedly different operating environment” after a bumper start to the year.

Jamie Dimon, boss of rival JP Morgan, last weekend also warned that recession was the “likely outcome” from a trade war.

Goldman Sachs yesterday reported a 15pc surge in first quarter profits to €4.08bn as market volatility helped it rake in record equity trading revenues.

But while the turmoil caused by Trump has been a boon for Goldman Sachs’ traders, investment banking fees fell 8pc as deal-making dried up.

And warning these are “times of great uncertainty”, Solomon said: “We are entering the second quarter with a markedly different operating environment than earlier this year.”

Equity traders at JP Morgan and Morgan Stanley also brought in record revenues in the first three months of the year, figures published last week show.

But banking executives are increasingly fearful over the impact of a global trade war on the economy.

It marks a dramatic change of mood for a sector that, until just a few months ago, was celebrating Trump’s return to the White House.

Goldman shares have fallen 12pc since the ‘Liberation Day’ tariffs were unveiled this month, while JP Morgan and Morgan Stanley have suffered similar falls.

Photo: David Solomon, chief executive officer of Goldman Sachs Group Inc. Photographer: Jeenah Moon/Bloomberg via Getty Images