President Donald Trump has gained an important ally in his effort to reduce the U.S. trade deficit: the head of the biggest bank in the country.

J.P. Morgan Chase CEO Jamie Dimon, in his annual letter to investors, said the nation has come up on the short end of multinational trade agreements and is within its rights to press for a more equitable environment.

"We should acknowledge many of the legitimate complaints around trade," Dimon wrote in a letter that typically gets a lot of attention on Wall Street. "Tariﬀs and non-tariﬀ barriers to trade are often not fair; intellectual property is frequently stolen; and the rights to invest in and own companies in some countries, in many cases, are not equal."

The comments are important in that they come amid sharp market volatility caused in part over fears that Trump could be starting a trade war.

Following through on promises to get better global trade terms for the U.S., the White House slapped 25 percent tariffs on a laundry list of 1,300 Chinese items. China responded immediately with its own tariffs on U.S. goods that it imports.

While the trade focus has turned to the U.S.-China dispute, Dimon said the issue is global.

"When the U.S. administration talks about 'free" and 'fair,' it essentially means the same on all counts," he wrote. "This is not what has existed. It is not unreasonable for the United States to press ahead for more equivalency."

On NAFTA specifically, Dimon said there's a "compelling" case to make sure the trilateral agreement with Canada and Mexico is "updated" and "fair" for all parties. China, he added, "is far more complex."

For one thing, he said China continues to be treated as a "developing" country when it in fact is one of the world's largest and fastest-growing economies. It therefore should be governed under the same World Trade Organization standards as the U.S. and other developed countries, he added.

"Recently, the United States threatened unilateral action against China. Of course, anything that starts to resemble a trade war creates risk and uncertainty to the global economic system," Dimon said. "One of the administration's best arguments is that negotiation alone has not worked."

Consequently, Dimon proposed a five-pronged approach for the U.S.: to define clearly what it wants from China, to set up a timeline for China to meet demands, to listen to China's complaints, to take any action in partnership with its allies, primarily in Europe and Japan, and, finally to "revisit" the Trans-Pacific Partnership and "fix the parts considered unfair."

Trump pulled the U.S. out of the TPP in protest over what he said were unfair conditions for the U.S. The TPP involves a dozen countries that border the Pacific Ocean but does not include China. Dimon suggested the U.S. could get back on board and China could be let in as well "if it demonstrates a willingness to meet its standards."

Dimon acknowledged that the trade negotiations are creating uncertainty and could lead to "negative outcomes."

WATCH: Dimon's annual letter takes on multiple controversial subjects.