Trump Tariff Impact: Citi CEO Jane Fraser Says Most Clients Can Absorb 10% Tariffs But Warns Of Impact On Investments, Hiring

Citigroup CEO Jane Fraser reportedly said on Monday that most of the lender’s clients could absorb the 10% tariffs but warned that investments and hiring are on hold until further economic clarity.

"If it is 10%, most of the clients we talk to say, 'yeah, we can absorb that,' if it is 25%, not so much," Fraser said, according to a Reuters report. The Citi CEO was speaking at the Milken Institute Global Conference in Los Angeles.

"Most companies are in a bit of limbo land... and in that investment spending, some of that is being suspended, some of the decisions on capex and hiring are on hold," Fraser said, according to the report. "That will have an impact on the demand and the economy.”

Fraser’s comments come as multiple companies have either withdrawn their full-year guidance or reduced their forecasts due to macroeconomic uncertainty.

However, Fraser has mostly sounded optimistic despite the ongoing trade tensions between the U.S. and its trading partners.

During the bank’s first-quarter (Q1) earnings, Fraser stated that Citi remains intently focused on executing its strategy based on a diversified business mix and will perform in various macro scenarios.

“When all is said and done, and longstanding trade imbalances and other structural shifts are behind us, the U.S. will still be the world’s leading economy, and the dollar will remain the reserve currency,” she stated.

Meanwhile, U.S. President Donald Trump said his administration would lower tariffs on goods imported from China “at some point” but also asserted that he wouldn’t be the one to take the first step.

“At some point, I’m going to lower them because otherwise, you could never do business with them. And they want to do business very much,” he said in his interview with NBC News.

On Monday, benchmark U.S. indices traded in the red as investors prepared for the Federal Reserve’s May monetary policy meeting outcome this week. Traders anticipate that the central bank will maintain a status quo policy.

The SPDR S&P 500 ETF Trust (SPY), which tracks the S&P 500, traded 0.17% lower on Monday afternoon, while the Invesco QQQ Trust, Series 1 (QQQ), which tracks the Nasdaq Composite, was down 0.20%.

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