{"id":13617,"date":"2025-04-16T15:05:15","date_gmt":"2025-04-16T15:05:15","guid":{"rendered":"https:\/\/finderica.com\/?p=13617"},"modified":"2025-04-16T15:05:15","modified_gmt":"2025-04-16T15:05:15","slug":"trump-tariff-pause-creates-bank-ma-payments-uncertainty","status":"publish","type":"post","link":"https:\/\/finderica.com\/?p=13617","title":{"rendered":"Trump tariff pause creates bank M&A, payments uncertainty"},"content":{"rendered":"
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Enjoy complimentary access to top ideas and insights \u2014 selected by our editors.<\/p>\n<\/div>\n<\/div>\n<\/div><\/div>\n

Markets reacted sharply when President Donald Trump announced his tariff plan on April 2, leaving bank executives at JPMorgan Chase, Wells Fargo and others unsure as to what the future holds for their institutions.\u00a0<\/p>\n

The April 9 announcement of a 90-day pause<\/u><\/ps-link> on reciprocal country-specific tariffs afforded banks some temporary relief and sent stock markets on a brief rally following the downturn<\/u><\/ps-link> created by the April 2 announcement. The S&P 500<\/u><\/a><\/ps-link> finished April 9 up roughly 10% at $5,456.90 and the KBW Nasdaq bank index<\/u><\/a><\/ps-link> was up roughly 10% to $113.68, according to MarketWatch data.<\/p>\n

In his original executive order<\/u><\/a><\/ps-link>, Trump’s declaration of a state of emergency was a necessary precursor to his administration’s tariff plan, as “a lack of reciprocity in our bilateral trade relationships, disparate tariff rates and non-tariff barriers and U.S. trading partners’ economic policies that suppress domestic wages and consumption \u2026 constitute an unusual and extraordinary threat to the national security and economy of the United States.”<\/p>\n

JPMorgan Chase<\/u><\/ps-link> CEO Jamie Dimon said during the company’s earnings call that clients have begun to err more on the side of caution than in previous months, and that calming market volatility could be helped by finalizing tariff agreements with America’s trading partners.<\/p>\n

Even leaders with Bank of New York Mellon<\/u><\/ps-link>, which reported record earnings for the first quarter of 2025, weren’t entirely unfazed by the tariff volatility. BNY reported that net income was up 21% year-over-year to $1.15 billion, while $1.58 earnings per share outperformed analyst expectations of $1.51 and revenue was up 6% across the same period to $4.79 billion.<\/p>\n

Robin Vince, BNY chief executive, told reporters on a call this month that tariff negotiations “are going to take some time” and market unpredictability “will likely have some length to it.”<\/p>\n

“There’s clearly been some signs of optimism at the beginning of the year, but we’ve now seen a reversal of sentiment, which has been driven by uncertainty,” Vince said. “So we now have quite a few things on the minds of market participants.”<\/p>\n

Read more: <\/b>Tariffs<\/u><\/b><\/ps-link><\/p>\n

Mergers and acquisitions appetites across the banking industry have also fallen prey to tariff woes.<\/p>\n

Trump’s reelection signaled the beginning of an age of promised deregulation, which banks took as a sign that, when combined with a favorable economy, would spur M&A deal activity. Those who were once optimistic about consolidation volumes have since adopted a sobered view on things.<\/p>\n

Deals in times like these aren’t impossible, but questions around inflation and trade policy typically can lead to pauses, Brian Foran, managing director at Truist Securities, told American Banker.<\/p>\n

“These kinds of wild swings and interest rates are a little tricky,” Foran said. “If you’re pricing a deal, and one of the key inputs is interest rates \u2026 it just makes it tough to get your arms around what you’re buying.”<\/p>\n

Read more: <\/b>Bank mergers and acquisitions in doubt with tariff whiplash<\/u><\/b><\/ps-link><\/p>\n

Learn about how Trump’s tariffs are complicating cross-border payments, stalling bank M&A activity, hampering municipal bond markets and more.<\/p>\n

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Trump’s tariff plays are muddying cross-border payments<\/h2>\n

The true impact of tariffs on consumer spending has yet to be realized following the 90-day pause. That hasn’t stopped companies managing international cash flow from looking closely at their own cash positions.\u00a0\u00a0<\/p>\n

In a simplistic view, taxes on imported goods tend to dissuade consumers from purchasing them and opt for items produced domestically or exported by another trade partner of the U.S., thereby strengthening the U.S. dollar. But Ernie Tedeschi, director of economics at the Budget Lab at Yale, told American Banker that those benefits are quickly reduced when foreign countries issue tariffs of their own.<\/p>\n

“Where this leaves currency traders and cross-border payments and people in finance is a lot of uncertainty about what the right way to trade is,” Tedeschi said. “A lot of what we’re seeing in markets now is really not a shock from the substance of the policy. \u2026 It is just the uncertainty of the policy.”<\/p>\n

Read more: <\/b>How Trump’s changing tariffs are upending cross-border payments<\/u><\/b><\/ps-link><\/p>\n

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Bank M&A pulse flatlines in wake of tariff pivots<\/h2>\n

Banking executives were optimistic about the economy following Trump’s return to the White House in November, as he entered the White House with promises of deregulation and other pro-economic messaging. Between the ebb and flow of the stock markets and trade policy shifts, hopes for strong mergers and acquisitions performance have been dashed.Leaders like JPMorgan Chase President and CEO Jamie Dimon and Dan Rollins, CEO of Cadence Bank in Texas and Mississippi, expressed similar downcast sentiments about the impact of tariffs on bankers’ appetites for M&A deals, with Dimon saying in his annual letter to shareholders<\/u><\/ps-link> that he “find[s] it hard to imagine a sufficiently compelling large-scale acquisition at this time.”<\/p>\n

Cadence Bank inked a deal<\/u><\/ps-link> this year to acquire the Savannah, Georgia-based First Chatham Bank for $103.6 million in cash and stock, which Rollins told American Banker could have been put on hold due to tariff shakeups but would have eventually closed regardless.\u00a0<\/p>\n

Read more: <\/b>Bank mergers and acquisitions in doubt with tariff whiplash<\/u><\/b><\/ps-link><\/p>\n

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Austan Goolsbee, president and chief executive officer of the Federal Reserve Bank of Chicago.<\/figcaption>

Vincent Alban\/Bloomberg<\/p>\n<\/p><\/div>\n<\/figure>\n<\/div><\/div>\n

Credit conditions are a top focus for Federal Reserve Bank of Chicago leader<\/h2>\n

Federal Reserve Bank of Chicago President Austan Goolsbee told reporters during an Economic Club of New York event this month that credit markets are a North Star of his to sort out the true status of credit conditions.<\/p>\n

“Direct lending credit has remained moderately restrictive and kind of tight, and most of the credit measures that go through the market, like junk bond spreads and others, have been very narrow,” Goolsbee said. “So, we’ve had a schizophrenic view of what our credit conditions are like. Are they restrictive, or are they loose?”<\/p>\n

The disparate views are owed in part to the wild stock market swings in the wake of Trump’s tariff moves, Goolsbee said, but should improve following the 90-day pause<\/u><\/ps-link>.<\/p>\n

Read more: <\/b>Fed’s Goolsbee watching credit conditions amid uncertainty<\/u><\/b><\/ps-link><\/p>\n

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Sergey Nazarov, the co-founder of Chainlink and CEO of Chainlink Labs.<\/figcaption>

Elliott O’Donovan<\/p>\n<\/p><\/div>\n<\/figure>\n<\/div><\/div>\n

How will the taxing effect of tariffs affect DeFi?<\/h2>\n

Sergey Nazarov, co-founder of Chainlink and CEO of Chainlink Labs, is predicting that decentralized finance will only grow in importance as trends of deglobalization and trade strife continue to worsen.<\/p>\n

Nazarov told American Banker prior to Trump’s temporary tariff pause<\/u><\/ps-link> that while cryptocurrency is a globalized market and “globalization is generally a very powerful force and it’s very powerful in markets,” DeFi is perhaps one of the few industries not being deglobalized.\u00a0<\/p>\n

A globalized market means “you have access to global liquidity or the purchasing power of everyone globally,” Nazarov said. “At the end of the day, the few things that are still globalized in nature will be very big.”<\/p>\n

Read more: <\/b>How Chainlink Labs CEO Sergey Nazarov sees tariffs affecting DeFi<\/u><\/b><\/ps-link><\/p>\n

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‘The economy is very solid’: Bessent defends tariff policies<\/h2>\n

For Treasury Secretary Scott Bessent, strong results from the March jobs report <\/u><\/ps-link>and optimism regarding tariff negotiations with foreign allies have made him confident that the economy can shoulder the weight of the Trump administration’s host of new tariffs.<\/p>\n

“There is a little uncertainty, but in general, the companies I’ve spoken to, people who have come, the CEOs who have come into Treasury, tell me that the economy is very solid. We got very good jobs numbers [this month], so I think that we are in pretty good shape,” Bessent said at the American Bankers Association Washington Summit on April 9. “I think we have about 70 negotiations lined up, I’m not planning on going anywhere for Easter.”<\/p>\n

Countries that have implemented tariffs on U.S. goods in response to U.S. taxes include Canada’s 25% tariff on specific vehicle imports and the European Union’s proposed 25% tariffs on a wide swath of products made in the U.S.<\/p>\n

Read more: <\/b>Bessent defends tariffs, calls for deregulation<\/u><\/b><\/ps-link><\/p>\n<\/div>\n

Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Enjoy complimentary access to top ideas and insights \u2014 selected by our editors. Markets reacted sharply when President Donald Trump announced his tariff plan on April 2, leaving bank executives at JPMorgan Chase, Wells Fargo and others unsure as to what the future holds for their institutions.\u00a0 The April 9 announcement of a 90-day pause<\/p>\n","protected":false},"author":1,"featured_media":13618,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"rank_math_lock_modified_date":false,"footnotes":""},"categories":[218],"tags":[136,1223,2800,474,1604,563,2066],"class_list":{"0":"post-13617","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-banking","8":"tag-bank","9":"tag-creates","10":"tag-pause","11":"tag-payments","12":"tag-tariff","13":"tag-trump","14":"tag-uncertainty"},"_links":{"self":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts\/13617","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=13617"}],"version-history":[{"count":0,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts\/13617\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/media\/13618"}],"wp:attachment":[{"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=13617"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=13617"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=13617"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}