“Tariffs add uncertainty, forcing clients to rethink supply chains and investments. Regulatory changes are among the top concerns for CEOs and CFOs, and we help clients navigate these challenges to maintain resilience and profitability,” Matthiessen said in an interview.
In Deutsche Bank since 2008, Ole took the current role as global head of cash management in 2019. In 2022, he took on the additional responsibility as the head of corporate bank for the Asia-Pacific or APAC region. Thereafter, since January 2024, he is also responsible for the corporate bank in Middle East and Africa.
“I oversee Deutsche Bank’s global cash management business, and regularly spend time in Europe, Asia, and the US. Within my responsibility for the overall corporate bank activities for Asia, Middle East and Africa and the associated travel, I visit both India and China up to four times a year,” said Matthiessen.
Globally, the German bank has four main business divisions. These are corporate bank, investment bank, private bank and asset management. In calendar year 2023, pre-tax profit of the corporate bank division at Euro 2.9 billion (about $3.1 billion) accounted for over half of the total profit before tax of the bank.
US President Donald Trump came to power vowing to correct trade imbalances by imposing higher tariffs. Since taking office in January, Trump has already imposed tariffs on Chinese goods coming into the United States, but has paused a 25% duty on Mexico, and Canada for a month, even as he plans to enforce reciprocal tariffs on other nations.
Trump’s plans for reciprocal tariffs would involve taxing foreign goods at the same rates other countries levy on US products.
Asked whether it was covid-19 or Trump tariffs that were more disruptive, Matthiessen said both created uncertainty, which hampers long-term investments.
“Initially, covid-19 caused significant disruption, but once processes adapted, businesses adjusted. Similarly, with the example of tariffs, once the regulatory landscape stabilizes, businesses will adapt,” he said.
According to him, Europe could face negative impacts from tariffs, particularly in sectors depending on export activities. However, many industries, he said, have already shifted production closer to target markets. “The broader macroeconomic impact remains uncertain, but it’s a potential risk our clients are closely monitoring.”
Matthiessen said that banking advice is more in demand as companies want to know how to navigate an increasingly challenging environment. He said that while protectionism can reduce cross-border trade, access to raw materials and labour ensures trade continues and the bank helps clients navigate regulatory challenges and provide advisory services.
“The strategic discussions we have with clients are more critical than ever, the partnerships stronger than ever. As a result, issues like cross-border dependencies and efficient currency management, equity allocation, regulatory changes, and managing trapped liquidity require trusted advisors,” he added.
Strategic insights, opportunities in India
India’s prime minister Narendra Modi met Trump last week and the two countries agreed to boost bilateral trade to $500 billion by 2030 and work towards a trade deal that would reduce duties and improve market access. Japanese investment bank Nomura believes that for India, short-term risks from reciprocal tariffs remain, but medium-term gains are possible once the dust settles on the trade war.
India, Matthiessen said, has become a highly digital economy, with trade activities shifting to digital platforms. According to him, this shift brings challenges like managing payments, ensuring infrastructure spending, and leveraging wealth creation for investments in R&D and other areas.
“As a foreign bank, we see opportunities in providing digital payment solutions, financing for platform-based businesses, and supporting cross-border trade. We also see increased capital flow into India-based corporates targeting foreign markets for continued growth paths,” said Matthiessen.
Source:https://www.livemint.com/companies/corporate-executives-wary-of-tariffs-complicating-investment-decisions-11739873188446.html