US mergers and acquisitions (M&A) activity in 2025 is at its worst start to a year over the last decade. Companies are reportedly petrified of the uncertainty surrounding President Donald Trump’s proposed tariffs, and escalating trade tensions dampened dealmaking.
According to a Financial Times insight, citing data from LSEG analytics, the number of transactions fell nearly 30% in January compared to the same period last year, marking the lowest level since 2015. In dollar terms, deal volume dropped 18% year over year.
Investment bankers and corporate executives attributed the decline to fears over Trump’s economic policies, which have tempered Wall Street’s initial optimism following his election on November 5, 2024.
Policy uncertainty cools down deal activity
CEOs and financial experts told FT that the unpredictable nature of the new administration’s policies is a major factor behind the slowdown. Antonio Weiss, a veteran dealmaker and partner at boutique advisory firm SSW, described the current landscape as “incredibly volatile.”
“Whatever you thought of prior administration policy, it provided a steady and predictable backdrop for markets,” Weiss said. “That’s been replaced by erratic policy, veering between a so-called business-friendly agenda and trade disputes, isolationism, and generally inflationary policies that cloud the interest rate outlook.”
The effects of Trump’s trade policies are being felt beyond the M&A space. Japanese beverage giant Suntory Holdings, the owner of Jim Beam and Maker’s Mark bourbon, expressed concerns about potential consumer backlash against its American whiskey brands.
Takeshi Niinami, CEO of Suntory, said the company was preparing for lower international demand for US-made products, citing both the impact of tariffs and shifting consumer sentiment in major markets such as Europe.
“We laid out the strategic and budget plan for 2025 expecting that American products, including American whiskey, will be less accepted by those countries outside of the US,” Niinami said. “Our plan is less export from the US to other countries like Europe, Mexico, and Canada. We have to be more focused on the US to sell American whiskey.”
Among other complainants is Steven Slate, the CEO of Slate Audio Digital, who told his followers on X that the Trump tariffs took his company’s production costs up.
“Two of our biggest international markets, Canada and Mexico, will buy less of our products because of the retaliatory tariffs. This is not winning,” he lamented.
Federal Reserve’s interest rate stance adds to slowdown
Beyond trade concerns, economists believe the Federal Reserve could maintain interest rates higher this year, predicting rate cuts to take place as late as Q3 2025. Just as the Feds are not taking any action to gauge what the Trump administration will do, companies are also in a “wait and see” mode.
Jonathan Gray, president of private equity firm Blackstone, noted that the central bank’s stance had contributed to a slowdown in M&A during the fourth quarter of 2024. Still, the asset manager, which holds over $1.1 trillion AUM, expects dealmaking to recover through 2025 as market volatility eases.
In the days following Trump’s victory, dealmakers rushed to revive transactions they feared could have been blocked under the Biden administration.
One investment banker, who requested anonymity to avoid drawing attention from the White House, described the initial reaction as a surge of market enthusiasm.
“After Trump won, we had a flood of calls from CEOs demanding that we get deals previously put on pause back on track,” the banker said. “It was full-on animal spirits, it was amazing.”
Now, the shade of optimism almost counts for naught, and the banker believes “there’s too much chaos and uncertainty.”
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This articles is written by : Nermeen Nabil Khear Abdelmalak
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