For New Hampshire bankers and their clients, President Donald Trump’s on-again, off-again tariffs are adding worrisome uncertainties on top of all the other economic uncertainties confronting businesses today.

New Hampshire bankers aren’t reporting major pullbacks in lending following the “Liberation Day” tariffs announced by the president in early April – tariffs that were then largely delayed, except for those against China, after markets began to crater across the globe.

But they are reporting widespread nervousness about the long-term impact of tariffs if they’re kept in place, in the case of China, or if they’re reimposed against other nations later this spring.

“There’s just a lot of uncertainty and choppiness out there,” said Jim Brennan, CEO of First Seacoast Bank and chair of the New Hampshire Bankers Association. “It’s about the tariffs, yes. But it’s also about interest rates and inflation and other things. There are a lot of challenges.”

Possible Recession in Offing?

Brennan and other bankers say the combined challenges are not yet harming the economy – but they do worry about the “R” word that’s increasingly being bandied about.

“Absolutely, I’m worried about [a possible recession],” Robert Cashman, CEO of Metro Credit Union, the Chelsea, Massachusetts-based institution that does about a third of its business in New Hampshire, mostly in the southern part of the state.

“It seems the rules of the game are constantly changing,” said Cashman, whose credit union holds about $3.5 billion in assets. “Tariffs are just adding to the problems. When you have delay, delay, delay on tariffs, it’s challenging for businesses. It’s really hard for businesses to plan. A lot of people are sitting tight, waiting.”

As for a possible recession, it’s still not considered likely – as least at this point in the ongoing tariffs drama, according to the American Bankers Association’s Economic Advisory Committee, a panel composed of 16 chief economists at some of the largest banks in North America.

As of early April, the panel was expecting economic growth of 2.1 percent for both 2025 and 2026.

But committee members did note that the president’s tariff proposals pose risks to corporate and consumer expenditures if they become long-term fixatures on the economic scene.

The committee estimated recession risk at 30 percent both in 2025 and 2026, though those risks could rise depending on future administration moves, the banking economists warned.

As for interest rates, Trump’s tariffs initially led to a dip in mortgage rates, but they’ve since jumped back up to nearly 7 percent due to recent market gyrations and fears the Fed won’t be lowering its short-term rates anytime soon.

Who’s Exposed to Tariffs in NH?

Adding it all up, community bankers across the state and nation remain optimistic about the economy – but they are concerned about tariff effects, according to interviews with bankers by the Registry Review  and survey results from the most recent Community Bank Sentiment Index, which is conducted by the Conference of State Bank Supervisors.

Frank Teas, CEO of Millyard Bank, said lending is holding steady at his Nashua-based commercial bank .

“Many people are still full-steam-ahead,” he said. “They may be cautious and nervous. But I haven’t seen any slowdown.”

Much of the nervousness over tariffs is tied to the import of key pieces of equipment and products that are needed by local businesses.

Teas noted that one of his clients, a defense industry company, is worried about supply-chain disruptions.

Meanwhile, some car dealers are worried about the higher tariff-related costs of their imported autos and auto parts, he noted.

“Everybody’s thinking about the tariffs and their impact,” said Teas, whose bank was formed in 2019 and today has about $253 million in assets.

Even bankers are talking about tariffs extensively amongst themselves, such as those who recently attended a banker’s conference in Washington D.C., said Teas, who attended the meeting.

“We all thought it’s a little too early to tell exactly what might happen long-term,” Teas said of his talks with banking-industry peers. “But we agreed [tariffs] are problematic long-term.”

Eventually, the tariffs, if they’ve kept in place for a while, will be felt by everyone, not just business owners and bankers.

“Average consumers will be impacted on a lot of things, including the price of food,” Teas said.

Metro Credit Union’s Cashman said he thinks the construction industry is particularly vulnerable to tariff shocks, with the price of key building materials, such as lumber and steel, increasing at faster rates.

“There’s a lot of unknowns about product prices,” he said. “I’m hearing that contractors are asking subcontractors to get their materials now, before prices go up. Tariffs haven’t yet led to a construction slowdown. But I think higher prices could eventually lead to a slowdown in projects.”

Loan Activity Still Strong

Despite the threat of tariffs, Cashman said loan activity remains strong, for both residential housing construction and small commercial projects.

“We’re still seeing robust loan activity,” he said. “We are seeing a lot of loan applications coming in. People are cautious, but they’re still planning ahead.”

First Seacoast’s Brennan agrees that construction industry executives are indeed nervous about potentially rising prices as a result of new tariffs – in addition to the spikes in construction costs tied to pandemic-driven supply-chain disruptions from a few years ago.

Still, many commercial projects in the booming Portsmouth area are moving forward despite various market concerns.

“Our commercial lending is going good,” said Brennan.

And it’s not just construction lending.

Many commercial clients are refinancing loans or talking out loans for expansions or relocations. Among those buying or improving small commercial properties are doctors and lawyers, he said.

“We’re seeing a cross-section of transactions,” said Brennan.

And, of course, demand for housing remains strong – and so there’s been no shortage of those seeking mortgages to buy new homes or condos.

“I haven’t seen any decline [in loan interest] tied to tariffs or the market turmoil,” Brennan said. “There’s been no groundswell of people saying, ‘I guess I’m not going to borrow.’”