Top bankers see US economy as bright spot under Trump despite tariffs threat

London - A chorus of top bankers said they are feeling positive about the prospects for the US economy under President-elect Donald Trump and think his tariff threats will be manageable.

At the same time, many senior financiers and asset managers at Bloomberg’s Women, Money and Power conference on Dec 10 said they see Europe facing slower growth and political division that will hold the continent back.

Both regions will need to tackle inflationary pressures that have eaten into people’s living standards, the executives said at the gathering.

“The bright spot is America – you talk a lot about a lot of roads leading here, fantastic entrepreneurship, this country is incredible,” said Ms Jane Fraser, chief executive of Citigroup. “Europe has a tougher time. They’ve got some more structural challenges: the labour market is not as flexible, they don’t have the scale that the States has, and they’ve got some challenges in terms of competitiveness.”

Ms Ana Botin, executive chair of Banco Santander, agreed, saying there is an “urgent need”, for Europe to reform and argued that the continent’s member states need to be spurred towards cooperation and have a greater focus on risk taking.

“One thing that works in Europe and Brussels is, ‘Oh my God, the Americans are going to get ahead again’,” Ms Botin said. “That’s the one thing that seems to work.”

Ms Anne Walsh, chief investment officer of Guggenheim Partners Investment Management, said markets had failed to price in the risk of France’s political chaos following a no-confidence vote earlier in November. Germany’s economy is also facing “recession pressures”, she added. 

“On a fundamental basis, Europe has struggled and I think will continue to do so,” she said.

Some of the recent political turmoil that has swept through the continent could present an opportunity for Britain to take more of a leading role in Europe’s relationship with America during Trump’s second term, according to Ms Jane Hartley, the US’ current ambassador to Britain.

“Your first call is to the US and our first call is to the UK,” Ms Hartley told the audience in London. “There’s some worry about the bigger countries in Europe, which is why I do keep coming back to the UK and we need the UK to lead because, as we know, we’ve seen a lot of political instability recently in France, political instability in Germany. So the UK has to play a role.”

The event’s speakers offered a generally positive view of the US economy, with business figures predicting that

Trump’s vows to impose wide-ranging cross-border tariffs

would be watered down. 

The incoming administration is “probably going to use the tariffs as a bargaining chip, and it probably will not be as bad” as many fear, according to Ms Paula Volent, chief investment officer of Rockefeller University’s US$2.5 billion (S$3.36 billion) endowment. 

Dealmaking frenzy

Dealmaking activity is expected to pick up from the lull of recent years as the Trump administration takes office, according to Ms Christina Minnis, head of global credit finance at Goldman Sachs Group. 

“Since the election, there’s been an increased amount of inquiry, both from sponsors as well as corporates that were either on the sidelines or nervous about what was going to happen,” Ms Minnis said. 

The challenges for 2025 may include more of the unusual events that have disrupted the world order recently, several of the attendees predicted.

“Geopolitical is going to trump economic for the next 12 months,” said Ms Alison Rose, former CEO of NatWest Group and now an adviser to private equity firm Charterhouse. “I think we will have a couple of one-in-100 year events.”
BLOOMBERG