A dramatic decline in global mergers and acquisitions (M&A) activity has been recorded following U.S. President Donald Trump’s declaration of “Liberation Day” on April 2, which triggered a sweeping wave of protectionist trade policies. An M&A Deal Signing 20-Year Low has now been reported, surpassing even the dismal levels observed during the 2008 global financial crisis and the COVID-19 pandemic.
M&A Deal Signing 20-Year Low Brings Global Deal-Making to a Standstill
According to financial data firms, deal-making activity among global corporations has been significantly curtailed in the weeks following the trade announcement. A steep fall in M&A transactions has been seen, with only a fraction of the deals being signed compared to average quarterly numbers from the past two decades.
Investment bankers have confirmed that uncertainty surrounding tariffs, trade retaliation, and geopolitical instability has forced executives and boards to adopt a wait-and-see approach. Instead of forging ahead with previously planned strategic combinations, companies have paused discussions amid fears of valuation collapses and regulatory hurdles.
Market Volatility and Policy Shocks Disrupt Boardroom Confidence
A surge in market volatility was triggered by the announcement of sweeping tariffs and trade barriers. As supply chains were threatened and global economic growth projections revised downward, corporate confidence took a hit.
Boardroom sentiment has been dampened by the unpredictability of the U.S. administration’s trade moves. Executives have reportedly found it difficult to accurately forecast revenue or earnings under the new trade dynamics. Consequently, valuations have become uncertain, and synergies once deemed achievable have now been viewed with skepticism.
Comparison with Previous Crises
The current M&A slowdown has exceeded the declines witnessed during previous periods of financial stress. During the 2008 financial crisis, deal-making was constrained due to a credit freeze, while in 2020, pandemic-induced shutdowns paralyzed business activity. However, both periods still witnessed the closure of essential and strategic mergers.
In contrast, the post-“Liberation Day” environment has seen fewer deals announced than even those historic lows. Financial analysts have pointed out that this downturn is driven not by a lack of capital but by heightened political and regulatory uncertainty.
Sectors Most Affected by the M&A Freeze
Industries with heavy reliance on international trade have been impacted the most. The technology, automotive, semiconductor, and consumer electronics sectors have reported a sharp decline in announced mergers.
Cross-border transactions have especially been hampered by heightened scrutiny from national security regulators and tariff uncertainty. Deals involving Chinese firms have been particularly affected, as new barriers have been erected by both U.S. and Chinese authorities in retaliation.
Domestic M&A in the U.S. has not been spared either. Many CEOs have chosen to delay or cancel transactions over concerns that costs of goods, supply disruptions, and inflation pressures may erode the projected value of mergers.
Bankers and Lawyers Left in Limbo
M&A advisory teams across major Wall Street firms have been left with fewer active mandates, as deals have been withdrawn from pipelines. Lawyers involved in due diligence and contract structuring have confirmed that numerous engagements have been put on indefinite hold.
“The rug has been pulled from under the feet of dealmakers,” a managing director at a top investment bank said anonymously. “No one wants to sign a billion-dollar deal today and discover next month that tariffs or political fallout has slashed its value in half.”
Trump’s ‘Liberation Day’: A Trigger for Retrenchment
President Trump’s “Liberation Day” speech on April 2 was initially intended to mark a reclaiming of economic sovereignty. However, global markets interpreted the move as the beginning of a full-scale trade war. Announcements included sweeping tariffs on a wide range of imports from countries including China, Germany, Mexico, and even long-standing allies like Canada and Japan.
Following these declarations, retaliatory tariffs were swiftly introduced by affected nations. A chain reaction has since unfolded, where global supply chains have been disrupted and investment flows redirected or frozen.
Deal Volumes and Value Plummet
According to data compiled by Mergermarket and Refinitiv, global M&A deal volume dropped by more than 70% in the weeks following April 2. In terms of deal value, less than $200 billion in transactions were announced worldwide during that time — the lowest quarterly figure in two decades.
Private equity firms, which had been sitting on record levels of dry powder, have also taken a step back. Fear of overpaying in a volatile market has kept many funds on the sidelines.
Antitrust and Regulatory Scrutiny Intensify
Another key factor contributing to the M&A slump has been the increase in regulatory intervention. Antitrust regulators in the U.S., EU, and China have adopted more aggressive stances. Deals that were once viewed as benign are now being subjected to lengthy reviews or outright rejection.
The uncertainty around the potential politicization of antitrust decisions has added a layer of unpredictability to the M&A process. Companies are unwilling to commit resources to deals that may be blocked or heavily modified post-announcement.
Investor Sentiment Turns Defensive
Institutional investors have also retreated into safer asset classes amid fears that deal synergies will not materialize under the new economic regime. Shareholder votes — once a formality in large strategic transactions — are now being approached with caution.
Activist investors have also begun pressuring companies to preserve cash, reconsider buyouts, and focus on core operations instead of expansion through M&A.
The Road Ahead: Outlook for M&A in 2025
If tensions continue to escalate, the global M&A outlook is likely to remain subdued. Analysts believe that only small, domestic, and highly synergistic deals are likely to proceed in the near future.
However, some optimism exists. If trade negotiations stabilize or if exemptions and carve-outs are introduced, M&A may rebound. Until then, executives are expected to proceed cautiously, with a strong focus on risk mitigation rather than aggressive expansion.
Conclusion
A record 20-year low in M&A deal signings has been recorded in the aftermath of Trump’s “Liberation Day” and the onset of a new trade war era. Boardrooms have been thrown into disarray, bankers sidelined, and investors left seeking clarity. Until geopolitical and economic conditions stabilize, the global M&A landscape is expected to remain frozen, with dealmakers waiting on the sidelines.
