The news: President Trump announced wide-ranging reciprocal tariffs on all imports, dubbing the move “Liberation Day.” These tariffs are creating a highly uncertain environment for credit card issuers and other payment providers to navigate.

How issuers responded to the news: Bank stocks dropped alongside the broader market after the tariff announcement.

• Citi shares, for example, tumbled 12% in a single day, their largest drop since 2020.
• Bank of America’s stock price also sank 11%, while Goldman Sachs and Wells Fargo each saw a 9% single-day drop.

A JPMorgan Chase research note warned that if these policies persist, they could “push the US and possibly global economy into recession,” raising the risk to 60% this year. This is a stark change in tone from February, when JPMorgan Chase COO Jennifer Piepszak said the bank is "cautiously optimistic" and “the underlying economic environment is still very strong” at a Bank of America conference.

The risks from tariffs: At a minimum, the tariffs are expected to slow economic growth. This would hurt card issuers, whose financial health is deeply tied to consumers’ wellbeing.

• Worsening economic conditions and higher prices will likely lead to a pullback in consumer spending, slowing credit card volume growth. In January, 31% of US adults said tariffs would lead them to prioritize spending on essential items only, per a First Insight survey.
• Consumers might also trade down to debit cards to avoid overspending and racking up debt, leading to lower swipe fee and interest income for issuers.
• Consumers could also have a tougher time paying down their debts, further exacerbating already elevated credit card delinquency levels. Since many consumers are already strained and lack savings as a backup, they will be especially vulnerable to economic shocks: More than half of US consumers are at least somewhat concerned about their ability to cover unexpected emergency expenses this year, per a study from Splitit and PYMNTS Intelligence fielded in January and February.

Our take: There remains significant uncertainty around how these tariffs will play out and if they’ll remain as is. However, credit card issuers are likely facing a bumpy year. We will be closely watching issuers’ Q1 earnings, starting with JPMorgan Chase and Wells Fargo on April 11, to assess the impact on issuers moving forward.