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.

Payments

What Adyen's tariff troubles portend for payments companies

Pressure on Asian merchants that sell to the U.S. caused the Dutch payment company to reduce its outlook. Payment experts say it's a matter of time before other firms face the same challenges.

By John Adams
Executive Editor, Payments

August 15
Monetary policy

Fed's Goolsbee backs central bank autonomy, questions tariffs

Federal Reserve Bank of Chicago President Austan Goolsbee said the Fed is not tied to Wall Street or political interests and that independence is necessary to prevent inflation.

By Maria Volkova
Reporter

August 13
Interest rates

Fed faces key choice on rates after latest inflation report

Core CPI, which excludes food and energy, rose to 3.1%, up from 2.9% in June.

By Maria Volkova
Reporter

August 12
Payments

Western Union CEO: ICE raids, tariffs no threat to Intermex deal

Analysts said trade war-related issues are pressuring the U.S./Mexico remittance corridor, lowering the value of the acquisition. Devin McGranahan told American Banker Intermex's technology and footprint provide a path for future expansion.

By John Adams
Executive Editor, Payments

August 11
Monetary policy

Fed's Bowman says jobs data solidifies case for rate cuts

Federal Reserve Vice Chair for Supervision Michelle Bowman said she foresees three interest rate cuts for this year, a view bolstered by the latest employment data.

By Maria Volkova
Reporter

August 11
Lending

As tariffs take hold, banks still grappling with uncertainty

President Trump's imposition of sweeping tariffs on more than 90 countries Thursday represents a major shift in the U.S. trade stance, but the impact on inflation, the Federal Reserve and the economy are still unclear.

By Ebrima Santos Sanneh
Reporter

August 7
Monetary policy

Powell: 'Many, many uncertainties' remain for tariff impacts

Federal Reserve Chair Jerome Powell said during his regular press conference Wednesday that the process of determining tariff-related price increases was always going to be slow, but it has taken longer than he expected.

By Kyle Campbell
Staff writer

July 30

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.