Tannenbaum: Tariffs aren't affecting M&A activity anymore
TL;DR
Trump-era tariffs no longer significantly impact M&A activity, which is now driven by AI investments and megadeals. The market focuses on technology-centric strategies, with AI readiness and large-scale consolidation overshadowing tariff concerns.
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Recent developments suggest that the impact of Trump-era tariffs on M&A activity has diminished, with market dynamics now increasingly shaped by AI-driven investments and megadeals. While tariffs initially introduced significant uncertainty, complicating due diligence and risk allocation in cross-border transactions, the M&A landscape in early 2026 reflects a shift toward technology-centric strategies and large-scale consolidation.
The PwC 2026 M&A outlook highlights a "K-shaped" market, where value growth is concentrated in high-profile, AI-focused megadeals rather than broad-based recovery. For instance, 2025 saw 111 megadeals exceeding $5 billion, a 76% increase from 2024, with technology, banking, and manufacturing leading the charge. These transactions prioritize AI capabilities, data infrastructure, and innovation, overshadowing earlier concerns about tariff-related supply chain disruptions.
Legal and financial advisors now emphasize AI readiness as a critical factor in deal valuation and execution. While tariffs previously influenced contract terms, MAE clauses, and supply chain reconfigurations, current negotiations focus on securing AI talent, cybersecurity, and scalable infrastructure. For example, Google's $30 billion acquisition of Wiz and IBM's proposed $11 billion deal for Confluent underscore the sector's pivot toward AI-driven growth according to PwC analysis.
However, residual tariff risks persist for industries reliant on global supply chains, particularly in manufacturing and chemicals. Yet, the surge in AI-related capital expenditures—estimated at $5–8 trillion over five years—has redirected strategic priorities, making tariff-related uncertainties less dominant in deal structuring.
In summary, while tariffs once complicated M&A transactions, the market's current trajectory is defined by AI's transformative potential and the pursuit of large-scale, technology-enabled synergies. Investors and dealmakers are recalibrating focus to align with this evolving paradigm.
(https://www.mayerbrown.com/en/insights/publications/2025/04/navigating-ma-transactions-amidst-trumps-tariffs-five-key-legal-issues-to-consider-in-todays-market): Mayer Brown, April 2025; Nixon Peabody, February 2025
(https://www.pwc.com/gx/en/services/deals/trends.html): PwC, 2026 M&A Trends
(https://www.nixonpeabody.com/insights/articles/2025/02/14/the-impacts-of-new-tariffs-on-ma-activity): Mayer Brown, April 2025
