Inside Stripe's response to Trump's tariffs

Stripe

The uncertainty that has accompanied the tariff battles has companies scrambling to change cross-border strategies, adding another wrinkle for payment companies that are already responding to growing demand for artificial intelligence and cryptocurrency.

 "If you look at a thousand years of global trade, it's like water. It always finds a way to happen," Paul Harapin, head of Asia Pacific and Japan at Stripe, told American Banker.

 Stripe this week deployed more than 60 products covering a range of artificial intelligence and distributed ledger uses as it competed with legacy card networks and fintechs such as Block and PayPal. These deployments come as the entire payments industry assesses the impact of President Donald Trump's tariffs, which are pressuring firms to support rapid changes in cross-border strategy.

 Geographic flexibility is important for a payment tech firm operating in cross-border payments and affects both financial institutions and the global corporations they serve, Sean Viergutz, PwC principal and financial services transformation leader, told American Banker. 

"Being present or easily able to operate in multiple regions allows firms to hedge geopolitical and regulatory risks by not being overly reliant on a specific country or region," Viergutz said.  "Additionally, it allows them to maintain operations in alternative markets when one becomes unstable."

Tariff trades

Thus far, payment companies have not reported a pullback in transaction volume, but they are changing their strategies to accommodate shifts in payment flows. Mastercard is leaning into travel within Europe and Asia as travel to the U.S. declines. 

Taking advantage of shifts in supply-chain strategies amid the trade war is a revenue opportunity for cross-border payment companies, according to FXC Intelligence, which reports these adjustments and currency hedges can help offset tariff-related cross-border payment risks, such as a decline in credit for exposed businesses and price volatility.

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"This is a big opportunity for international commerce," Tony DeSanctis, a senior director at Cornerstone Advisors, told American Banker. "Because the time, currency risk, and cost of international transactions can be mitigated using dollar-denominated stablecoins, this represents a sizable opportunity for international transactions."

Stripe, which provides payment portals for businesses, among other products, has a roster of clients that includes software companies, AI developers , financial institutions and more traditional businesses.

 The tariffs don't affect digital businesses because they don't ship tangible items, Harapin said, "but that could change."

The U.S. could see a large impact from the trade war. The U.S. imported $438.9 billion worth of Chinese goods in 2024, an increase of 2.8% compared with 2023, according to the Office of the United States Trade Representative. That's second to only Mexican imports, which totaled $505.9 billion in 2024. The U.S. also has a $140.5 billion trade deficit, which is one of the reasons Trump cited for imposing the tariffs.

Stripe has seen an increase in clients that are seeking to pivot their cross-border businesses to deemphasize the U.S. in response to the trade war.

 "We've been told 'We're tripling down in the U.K.,'" Harapin said. "They're already there but are now moving faster."

As an example of how tariffs can quickly shift trade patterns, Harapin referenced Australian wine exporters that sold more to the U.K. after China imposed tariffs on Australia in 2021. China was retaliating against Australia's appeal to the World Health Organization to investigate the origins of the COVID-19 pandemic.

To deepen its presence in Asia, Stripe recently partnered with Luckin Coffee, a large China-based chain that is expanding elsewhere in the region. The payment company hopes the Luckin deal can raise Stripe's profile, drawing attention to Stripe services that can address compliance and currency differences within the region. 

"Asia Pacific is positioned very well for growth," Harapin said. "The problem is the complex regulations and managing fraud. There are also different payment methods in different countries."

AI and stablecoins

Stripe this week issued several products, including Stripe's Payments Foundation Model, an AI engine trained on tens of billions of transactions that captures hundreds of subtle signals about each payment that specialized models can't.

It also launched Stablecoin Financial Accounts to businesses in 101 countries. The product comes three months after Stripe's acquisition of stablecoin platform Bridge.

Native AI tools enable faster and more adaptive operations, Viergutz said, adding AI's influence improves fraud detection, FX optimization and automation of longer manual processes. 

"Similarly, distributed ledger has unlocked capabilities that traditional rails have yet to match, such as instant cross-border settlement, and improved transparency and payment processing," he said.

 Bridge this week partnered with Visa on a card issuing product that enables stablecoin balances to be used for payments. Fintechs such as Ramp, Squads, and Airtm will use Visa cards linked to stablecoin wallets in dozens of countries. When a cardholder makes a purchase, Bridge deducts the funds from their stablecoin balance and converts to traditional currency, enabling the merchant to get paid in their local currency. 

"There's a lot of use cases for stablecoins," Harapin said. "The currency flows can be insecure."

These new products will also support flexibility in cross-border payment strategy, according to Harapin. "Many of these companies want to be global on day one, and they need to commercialize their businesses on day one," he said.