Challenges and ramifications for corporate consolidations in the United States
Updated Article:
Published at 06 May 2025
The M&A market is feeling the heat under President Trump's reign, with policy inconsistencies and Wall Street rollercoasters leaving a shaky foundation.
As President Trump's administration clocks 100 days, and despite his undeniably pro-business demeanor, the corporate world of 2025 isbathed in uncertainty, wild stock-market swings, and, in some corners at least, baffled looks at seemingly daily policy flip-flops on international tariffs. And while the US remains a robust and stable jurisdiction, the mergers and acquisitions (M&A) market, thriving on short-, medium-, and long-term stability, faces a series of shifting legal, regulatory, and geopolitical variables. In essence, the administration's policies suggest a more convoluted and contradictory impact on the M&A landscape, despite President Trump's consistent pro-business rhetoric.
Speaking exclusively to ICLG News, an anonymous M&A lawyer from a leading, global US law firm shares their insights via email: "Following the wave of enthusiasm about potential deal-making post-election, Q2 has reflected tempered confidence based on a lack of certainty."
They continue: "M&A relies on confidence in the future. As it becomes tougher to predict financial performance, many boards and executive teams are mulling over pausing new deal activity until they fully comprehend the impact of current economic dynamics."
MERGER ENFORCEMENT AND SETTLEMENTS
One of the most significant legal developments of the second Trump era involves merger enforcement. Led by Assistant Attorney General Abigail Slater of the Department of Justice (DoJ) Antitrust Division, the Trump administration has signaled a commitment to a traditional, consumer welfare-based framework, contrasting markedly with the expansive interpretations seen during the Biden era, which considered factors like market fairness and working conditions[1]. However, despite the administration's lighter-touch approach, recent DoJ actions, including suing to block Hewlett Packard's USD 14 billion acquisition of rival Juniper Networks just days after the president's inauguration, highlight the administration's focus on market impact rather than broader societal goals.
TRUST (OR LACK THEREOF) AND TARIFFS
Trump's tariffs have been a focus of his economic policies, but they have not directly transformed the M&A environment. The easing of auto tariffs and the provision of credits for domestically assembled vehicles demonstrate a willingness to adapt trade policies in response to industry pressure. This adjustment may indirectly influence M&As by impacting the financial health and competitiveness of companies within these sectors[4].
However, the overall public perception of Trump's economic policies has been mixed, with approval ratings low and concerns over inflation and economic growth lingering. This negative sentiment might impact investor confidence, thereby affecting the overall M&A market[5].
ADAPTING TO THE NEW NORM
Trump's second-term policies present a paradox for the M&A market: while certain deregulatory and tax measures foster positive tailwinds, enhanced CFIUS scrutiny, complex antitrust reviews, and volatile trade policies introduce formidable headwinds. Corporations, private equity firms, and their lawyers would be wise to adopt a sophisticated, multifaceted approach to deal-making in this environment. Early regulatory risk analysis, proactive engagement with government bodies, robust contractual protections, and meticulous board processes are more crucial than ever. New York-based Minwoo Kim, special counsel at Covington, adds, "To head off a prolonged dispute, companies should consider minimizing uncertainties, asserting their rights, and negotiating with their business partners to manage risks related to tariffs."
In a nutshell, Trump's America may be open for business, but it demands that potential mergers and acquirers adopt a solid, defense-oriented legal strategy, show strategic foresight, and brace for the increased regulatory, political, and economic risks inherent in this era.
- The uncertainty in the M&A market due to President Trump's administration, marked by policy inconsistencies and wild stock-market swings, is causing boards and executive teams to hesitate on new deal activity, asserting a need for full comprehension of current economic dynamics.
- The Administration's focus on market impact, as demonstrated by the DoJ's actions, such as suing to block certain mergers, creates formidable headwinds for the M&A market, necessitating a sophisticated, multifaceted approach to deal-making.
- In 2025, the M&A market is still figuring out how to adapt to the new norm under President Trump's second term. Companies must show strategic foresight, solidify defense-oriented legal strategies, engage proactively with government bodies, and meticulously manage risks related to tariffs to maintain stability and avoid cross-border disputes.
