Fitch Sees European Banks Weathering Higher US Tariffs

European lenders are expected to absorb the latest round of US tariff increases with limited stress, according to a note from Fitch Ratings. The credit-rating agency said the levies, which took effect earlier this year, will have only a moderate impact on banks’ profitability and are unlikely to weaken their capital or asset-quality metrics. Fitch added that the region’s diversified revenue streams, solid funding profiles and generally strong capital buffers provide a cushion against the indirect effects of slower trade and economic growth triggered by higher US import duties. The agency does not anticipate negative rating actions for European banks on the basis of the tariff changes alone.