Tariffs in Banking

Tariffs are influencing the banking sector as bankers navigate today's economic volatility. Tariffs are introducing complexities that impact lending, investment strategies, and overall financial stability across areas of the financial world. As a banker, it is essential that you understand the many ways that tariffs could impact your organization, including escalating trade tensions and shifting regulatory landscapes. Explore our comprehensive coverage, including news, expert analysis, videos, webinars, and market research to stay up-to-date in real-time on the latest tariffs news and insights for financial professionals.

Capital markets

Market volatility has not cut valuations: Fed report

Financial markets were shaken but not stirred this past spring, according to the Federal Reserve, as swinging stock prices and bond yields did little to bring down elevated asset prices or leverage.

By Kyle Campbell

June 20
M&A

Bank M&A hasn't been slowed by tariff uncertainty: Report

Even as unpredictable trade policies slowed down mergers in other sectors, banks have kept inking M&A deals at the same pace, according to a new report.

By Nathan Place

June 18
Payments

Many exporters no longer want dollars, US Bank exec says

Paula Comings, the head of currency sales for U.S. Bancorp, said American importers are hearing from their foreign counterparties that they no longer want to be paid in U.S. currency.

By Carter Johnson

June 16
Commercial banking

Midsize companies see opportunities amid tariff chaos

The impact of President Trump's tariffs is the top concern for most middle-market American businesses, a new KeyBank survey found. But these firms also view the scrambled landscape as a chance to innovate and restructure.

By Nathan Place

June 13
Earnings

Canadian banks prepare for the worst amid Trump tariffs

Royal Bank of Canada, BMO Financial and others increased allocations to cover the possibility of souring loans as trade pressures shake international markets.

By Frank Gargano

June 12
Federal Reserve

Fed likely to hold steady after muted tariff impact in CPI

The government measure of inflation for May ticked up modestly, adding to the signals that the Federal Reserve is unlikely to move on interest rates when it meets next month.

By Kyle Campbell

June 11
Monetary policy

Solid hiring in May undermines calls for Fed rate cut

The U.S. economy added 139,000 jobs, a healthy clip that counters the president's calls for a rate cut to bolster the labor market.

By Kyle Campbell

June 6

Banks on deck for quarterly earnings amid tariffs mayhem: Live coverage

The first three months of the year coincide with the start of President Donald Trump's second term in office. Investors are likely to be more interested in banks' outlooks amid swings in tariff policy than the first-quarter results.

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Multimedia

Resources

The latest American Banker research and discussion on Tariffs

Frequently Asked Questions:

What proactive measures are banks using to mitigate the impact of tariffs?

Trade finance services and corporate client advisory on supply chain adjustments allow banks to lessen the impact of tariffs. For example, Citizens Financial’s trade finance unit helped companies accelerate inventory purchases and use letters of credit to secure transactions ahead of new duties. Many banks are also using hedging strategies and leveraging deregulation windfalls to address higher costs.

How should banks recalibrate interest rate forecasting and monetary policy expectations amid tariff-induced economic disruptions?

Banks can incorporate tariff-driven inflation and growth scenarios into their interest rate models and maintain flexibility in policy outlooks. Institutions are closely tracking Federal Reserve signals in this volatile trade environment, as tariffs can both slow growth and raise prices. This can put the Fed “in a quandary,” requiring banks to update their asset-liability strategies to account for potential rate cuts or even hikes.

What advanced compliance and technology strategies are banks using to optimize cross-border payments and trade finance?

Banks are deploying sophisticated payment analytics and real-time treasury tools to manage cross-border flows amid shifting tariffs. BNY Mellon, for example, notes clients are using predictive cash-flow analytics to navigate uncertainty. Institutions can also improve compliance automation by integrating systems for instant sanctions/tariff list updates. This can ensure cross-border transactions meet changing trade rules.

What are best practices in risk modeling and scenario analysis for banks to navigate tariff-related risks?

Leading banks can look to bolster scenario analysis capabilities to account for tariff shocks. Banks can run stress tests on portfolios with heavy exposure to tariff-impacted sectors such as automotive manufacturing and agriculture as well as model multiple trade war outcomes. Analysts also advise enhancing “playbooks” for varied economic scenarios and properly pricing new loans for added risk. For example, this could mean using forward-looking models to adjust credit loss provisions and capital plans.

How can banks prepare for long-term industry trends driven by tariffs and trade uncertainty?

Banks can prepare through incorporating trade policy shifts into growth investments as well as technology investments. This includes diversifying supply chain financing, investing in local manufacturing projects, and strengthening presence in resilient markets. Industry leaders like JPMorgan’s Jamie Dimon are watching the “restructuring of trade and tariffs” as an inflationary force shaping future strategy.

Which banking operational units should banks prioritize for tariff exposure assessments?

Commercial lending divisions, including those that finance manufacturers, agriculture, and exporters are a priority. These units will most directly face clients impacted by tariffs. Other units to review exposure risks include specialized trade finance and supply chain finance.

How is artificial intelligence (AI) helping banks address tariff-related challenges?

AI enables banks to respond faster and more efficiently to tariffs. Machine learning models can recalibrate pricing and supply chain finance strategies as trade policies shift. Generative AI tools can shorten the time needed to update payment systems for new tariff rules update payment systems for new tariff rules. AI-enabled platforms can make compliance a proactive function by automating real-time screening of transactions against changing trade restrictions.