*

Severity, speed of Trump's tariffs took markets by

surprise

*

Bankers worry the turmoil will erode revenue - and bonuses

*

April 2 announcement derailed, delayed several IPOs, other

deals

*

Tariffs cause 'confidence shock' for investors in US

assets

By Svea Herbst-Bayliss, Isla Binnie, Ross Kerber and Dhara

Ranasinghe

April 10 (Reuters) - With markets crashing after U.S.

President Donald Trump announced his latest tariffs, Citigroup's ( C/PN )

banking head Viswas Raghavan called a global meeting of senior

bankers on Monday and told them to get on the phone with their

clients.

Raghavan's message was simple, according to one banker on

the call: Stay close to clients because if you do not, a

competitor will. Raghavan told them to assure clients that Citi,

which nearly collapsed during the 2008 financial crisis, had

plenty of funds this time to weather the tariff storm, said the

banker, one of two who recounted the call.

Citi's global meeting, which has not been previously

reported, was one of many at banks across Wall Street since

April 2, when Trump unleashed a tariff war that has wiped out

trillions of dollars in market value across the globe - a

painful bleed that was only stanched on Wednesday when he

relented, announcing a 90-day pause on duties against some

countries.

Citi declined to comment. Raghavan could not be reached

after business hours on Wednesday.

In interviews, more than half a dozen investment bankers and

money managers said they had spent days talking to clients who

make everything from cars to insulated mugs to sportswear,

helping them grapple with the swift and dramatic consequences of

Trump's lurches on trade.

At Citi, Goldman Sachs ( GS ), Bank of America ( BAC ),

Lazard ( LAZ ) and elsewhere in conversations spreading into

this week, several bankers said, they strategized how to respond

to a flood of calls from corporate clients as they privately

worried about their own bonuses this year.

Goldman Sachs ( GS ) and Bank of America ( BAC ) declined to comment.

Lazard ( LAZ ) did not immediately respond to requests for comment

outside business hours.

'OH MY GOD'

The advice to corporate clients, several bankers said: Stay

away from forecasting too much, given the uncertainty from the

White House.

Clients were worried about jobs, the economy and credit, a

senior financial industry executive said: "We get on the calls

and people are saying, 'Oh my God, what's happening?'"

The flurry of behind-the-scenes conversations with clients,

some details of which have not been reported before, show how

Trump's decision to raise U.S. tariffs to their highest in more

than a century has sent shockwaves through the corporate world.

Uncertainty about Trump's policy direction is paralyzing

companies' decision-making and could have dire consequences for

the economy, analysts say. Trump's pause does not remove that

uncertainty.

"Even if the administration decides to de-escalate global

trade wars and shift their focus to other policy areas, we're

still not out of the woods," said Christian Hoffmann, head of

fixed income for Thornburg Investment Management in Santa Fe,

New Mexico. "Uncertainty remains exceptionally high."

In explaining his pause, Trump said people had been "jumping

a little bit out of line." He told reporters: "They were getting

yippy, you know," using a golf term for wrist spasms.

GENUINE DISBELIEF

While Trump had telegraphed plans to raise tariffs for

months before November's election, the severity and speed with

which he ratcheted up the levies took investors by surprise.

"There was genuine disbelief that this was happening," Seema

Shah, chief global strategist at Principal Asset Management in

London, said of her conversations the morning after the tariffs

announcement.

Trump's rapid escalation caused massive dislocations in

global markets, particularly in the United States, where foreign

investors saw new risks in formerly safe-haven investments like

Treasury bonds and the dollar - two anchors of the global

financial system.

One New York-based institutional investor said the most

senior personnel at his fund met last week and again after the

weekend to discuss how the volatility was impacting their

portfolio.

The investor, who requested anonymity to speak candidly,

said the risk team had scrutinized all their holdings for

comparisons with drawdowns during past crises, envisaging

potential losses on their equity positions of 10% or 20%. They

debated whether they should have hedged against the tariff risk

but decided it would have been too expensive, he said.

CalPERS Chief Investment Officer Stephen Gilmore said the

$500 billion retirement fund for California's public workers was

well positioned but "we aren't immune to these market

challenges," adding that the trade war could hit its investment

returns, to be reported on June 30.

"The new tariffs and other policy changes are creating the

kind of volatility that's reminiscent of the Global Financial

Crisis and the early stages of the COVID-19 pandemic," Gilmore

told Reuters in a statement.

DEALS KILLED

Trump's April 2 announcement immediately derailed or delayed

several initial public offerings and other deals, according to

interviews with more than a dozen investment bankers, private

equity investors and portfolio managers.

One private equity investor in London who was scheduled to

sign the paperwork to acquire a midsize tech company in Europe

said he pulled the deal last Thursday.

Executives at New York ticket reseller Stubhub, Swedish

buy-now-pay-later firm Klarna and fintech company Chime - all of

which were scheduled to launch investor presentations this week

- watched the markets and waited before deciding by the end of

the week to delay their IPOs by at least a week or two, Reuters

has reported.

One M&A lawyer, requesting anonymity, said they had started

the year thinking it would be strong, with pent-up demand for

IPOs and other transactions. "But when the VIX pops up to

COVID-era levels, you can't do deals," they said, referring to a

volatility measure known as Wall Street's fear gauge.

Investors were already bracing for disappointment when big

banks start reporting first-quarter results on Friday. Global

investment banking fees fell 4.9% to $21.47 billion in the

quarter from a year earlier, according to Dealogic.

Bankers worry that this month's turmoil will further erode

revenue - and possibly bonuses next year - four bankers said.

"The problem is that there is a confidence shock when it

comes to investing in the U.S.," said Mabrouk Chetouane, head of

global market strategy at French asset management firm Natixis

Investment Managers. "The U.S. president is unpredictable for

investors. The rules can change overnight."