Trade agreements

The tariff regime unveiled last week by President Donald Trump has injected a significant dose of uncertainty into the banking industry and unleashed the specter of an economic slowdown.

The president exempted Mexican and Canadian goods covered by the North American trade agreement from his 25% tariffs, offering reprieves to America's two largest trading partners.

Commerce Secretary Howard Lutnick said the president is likely to defer his 25% tariffs on Canada and Mexico for all goods and services covered by the North American trade agreement.

President Donald Trump's 25% tariffs on Canada and Mexico are on track to go into place on Tuesday and he plans to impose an additional 10% tax on Chinese imports, moves that would deepen his fight with the nation's largest trading partners.

The COVID-19 pandemic revealed the fragility of complex global supply chains. Bankers say they are hearing from more U.S. clients who want to change that by moving manufacturing and supplier operations closer to home.

The timing couldn’t be worse for ag and energy lenders as well as global banks, which were all counting on the Chinese market to help bolster commercial lending and fee income.

Lenders that depend on the Export-Import Bank to back loans to exporters are already seeing business borrowing pick up after Congress reauthorized the agency in December.

A smiling President Donald Trump thanked some of the biggest U.S. companies for about 10 minutes on Wednesday at the White House, where he was celebrating his trade deal with China. When it came to JPMorgan Chase, he asked for reciprocation.

The country's biggest bank is leaning more on fee income to offset rate pressures, expanding in selected U.S. cities and laying the groundwork for operations in China that CEO Jamie Dimon hopes will endure “for 100 years.”

But some industry watchers are tempering expectations, saying that the language is too vague to know for sure if China is serious about introducing more foreign competition.