* Bank says lending decisions already impacted
* Trade-focused bank fears protectionism could hit revenues
* Hitting new 8 pct return on equity goal by 2021 feasible
LONDON, March 8 (Reuters) - U.S. President Donald Trump's proposed trade tariffs are already influencing lending decisions by Britain's Standard Chartered and could have an impact on its profitability, its Chief Financial Officer told Reuters.
The Asia, Africa and Middle East-focused bank has been taking into consideration the effect Trump's plan to hike duties on steel to 25 percent and on aluminum to 10 percent could have on loans to sectors that might be hit, Andy Halford said.
"I think it would be remiss of us not to be factoring it into lending decisions. But what it exactly is obviously will need a little bit of thought," he said in an interview.
Trump is this week expected to sign a presidential proclamation to establish the tariffs, which he says will stop cheap imports from countries like China hitting U.S. industry and jobs.
His proposals sparked retaliatory threats from China and Europe and fears of a global trade war, rattling markets and groups like Standard Chartered that have bet big on free trade.
The bank is more focused on trade and commodities than many of its global peers, and it is trying to boost its business with U.S. customers who trade with emerging markets. Stanchart makes 80 percent of its profits in Asia.
TIT FOR TAT
The bank tested the impact of a severe world trade downturn triggered by rising protectionism in its 2017 stress test, an indication of how important trade flows are for its bottom line.
Halford said it was business as usual for a large part of the bank, as the majority of its clients were not affected. But if protectionism spread beyond the U.S. or Americas it will have to extend the review of the risks it poses.
"If there ends up being a sort of tit-for-tat and other sectors are brought into it then we'll extend the review."
The tariffs could also impact the speed at which StanChart is able to reach its new profit target, Halford said.
StanChart last month unveiled a new medium-term goal of an 8 percent return on equity, as it recovers from a restructuring that saw the key profitability metric fall into the negative.
While it has not announced the timetable for achieving the goal, Halford said analysts predicting the bank should get there by 2021 if it grows at its current pace are not wrong.
"If this U.S. protectionist rhetoric does take hold, then maybe it could be a little bit longer," he said.
The bank last year posted a return on equity of 3.5 percent, up from 0.3 percent. Halford said revenue growth, income from rising global interest rates and a reduction in Britain's bank levy should all contribute to it hitting the 8 percent goal. (Editing by Silvia Aloisi and Alexander Smith)