Stocks are
now in major decline after US President Donald
Trump announced
tariffs on at least 10% across all countries. Those that have a high trade deficit with the US have been impacted the most; China, for instance, will face a 54% tariff and will prepare countermeasures.
According to Trump, Liberation Day on 2 April 2025 was the day the US started to end its reliance on goods made overseas. White House press secretary Karoline Leavitt also
remarked that “April 2nd, 2025, will go down as one of the most important days in modern American history. Our country has been one of the most open economies in the world, and we have the consumer base, hands down – the best consumer base. But
too many foreign countries have their markets closed to our exports. This is fundamentally unfair.”
Leavitt continued: “The lack of reciprocity contributes to our large and persistent annual trade deficit that’s gutted our industries and hollowed out key workforces.” Innovations in digital payments, blockchain technology, and AI have revolutionised how
consumers, businesses, and governments interact with financial services. However, this day could represent an important turning point in financial history, influencing both the regulatory environment and the trajectory of emerging fintech. Here’s how.
Cross-border transactions
Trump’s ‘America First’ policy will have a dual impact on fintech innovation. On one hand, it creates tension in
global trade and finance, potentially discouraging some international fintech startups from focusing on the US market due to trade restrictions and tariffs. On the other hand, the administration’s lack of stringent regulations on
cross-border transactions could make the US an appealing hub for international fintech startups looking to access a more flexible regulatory environment.
Zaki Farooq, chief technology officer and co-founder, PayFuture, advises that the “reintroduction of US tariffs on low-value foreign imports, including a 30% tax on sub-$800 orders and even steeper rates for China and the EU, threatens to reshape the landscape
for ecommerce and cross-border trade. For merchants reliant on low-cost international fulfilment, the loss of the de minimis exemption will directly affect margins, logistics, and the customer experience.
“As new tariffs increase the cost of global trade, businesses eyeing international growth – or already trading across borders – face mounting challenges. For retail and ecommerce merchants especially, rising duties are squeezing margins and prompting a rethink
of cross-border strategies. With Shein and Temu alone accounting for nearly 600,000 daily US-bound parcels under this scheme, the impact on digital-first retail is massive. Higher prices and longer delivery times may frustrate customers, leading to more refund
requests and chargebacks unless expectations are properly managed.
“In this environment, efficient international payments become a key competitive differentiator. Tariffs may be out of your control, but improving approval rates to increase your profitability, settlement delays, and currency conversion fees is not. Businesses
can cut costs by optimising their payment providers, using local acquirers, and offering region-specific payment methods and currencies that improve both acceptance rates and customer satisfaction.”
Deregulation
The Trump administration's push for
financial deregulation seeks to remove or simplify rules that stifle innovation and fintech firms, the disruptors of traditional finance, will continue to benefit from this. With reduced regulatory barriers, fintech firms could focus more on innovation
rather than spending resources on navigating complex compliance requirements. The elimination of restrictions will allow for faster growth and a greater ability to experiment with new technologies.
Elaine Duffus, senior regulatory analyst, Wolters Kluwer Compliance Solutions, says: “As we witness the current administration's focus on financial services deregulation, including potential changes to Dodd-Frank and shifts in agency enforcement priorities,
these findings take on added significance. While violation volumes dropped to levels similar to 2022-2023, the sharp increase in penalty amounts signals a focused approach on high-impact enforcement that could carry implications even in a deregulatory environment.”
Cryptocurrency and blockchain
The Trump era has seen the rise of private sector-driven cryptocurrency initiatives.
Stablecoins, for example, have become an important focal point of fintech development. With limited regulation from the US government, fintech companies are able to experiment with and build solutions that address consumer needs for digital currencies with
lower volatility, fostering innovation in digital finance.
Timo Lehes, co-founder, Swarm Markets, reveals that “Trump’s ‘Liberation Day’ tariffs carry substantial risks for investment markets, particularly thanks to the inflationary threat that increasing costs for imported goods like steel and automobiles will
have. Higher input prices ripple through supply chains, elevating production costs and ultimately, consumer prices.
“This inflationary pressure complicates monetary policy, likely forcing central banks to maintain or raise interest rates to curb demand and stabilise prices, rather than cutting rates to spur growth. This, and the threat of recession it could cause, is
ultimately what is destabilising investment markets right now.
“Trump’s tariffs threat is already weighing on riskier assets such as stocks and crypto assets. Market confidence is being sapped by rhetoric and uncertainty. Bitcoin was one of the big stories at the end of 2024 but it is currently behaving like a tech
stock rather than a safe haven. And the full implications of the tariffs on the global economy have yet to be felt.”
A new era for fintech
AIB chief economist David McNamara gave his immediate reaction to this news and mentions that “the impact is set to be a sharp fall in US trade and could generate higher inflation for US consumers. With a third of Irish goods exports going to the US, the
tariff could yield a hit to demand for Irish exports from the US.”
On the other hand, Andy Draycott, portfolio manager, Chikara Investments said: “Trump’s tariffs offer an opportunity to accelerate the rate at which India picks up some of China’s manufacturing share. We expect an increase from India’s current 1% market
share as companies shift at least some of their manufacturing capacity to sidestep Sino-US uncertainty. Additionally, Trump’s reciprocal tariffs on India could catalyse improved economic relations through further Indian concessions as officials have been debating
lower duties for a variety of goods to offset the impact of tariffs.”
In summary, Trump's Liberation Day, if we consider it as a representation of his deregulatory stance and economic policies, will have a profound and lasting impact on the fintech landscape.