Tariff Worries Plunge M&A to Lowest Level Since 2009

Mergers and acquisitions (M&A) have sunk to their lowest level in 20 years, with deal-making now worse than during the Great Recession of 2008-09 and the COVID-19 pandemic.

Investment bankers and corporations around the world have stopped M&A deals following the President Donald Trump administration’s global trade war, which started with the announcement of tariffs April 2, Reuters reported Tuesday (May 6).

M&A contracts, a key measure of economic health and business optimism, plunged to 2,330 in April, the lowest level since February 2005, per the report, which cited data from Dealogic. That’s 34% below their historical monthly average. The United States, the world’s largest deal-making market, saw 555 deals inked last month, its fewest in any month since May 2009.

Spooked by the uncertainty caused by Trump’s tariffs against nearly all countries, retaliatory measures from other nations, and gyrations by global stock markets, companies have pulled the plug on acquisitions and, separately, initial public offerings. Sweden’s buy now, pay later provider Klarna paused its plan to go public on the New York Stock Exchange two days after Trump’s April 2 tariff announcement.

Trump imposed and then paused for 90 days a minimum 10% tariff on all U.S. imports and slapped higher levies on key partners, including the European Union and Japan. U.S. duties on imports from China now total 145%.

Global businesses are waiting for the outcome of the Federal Reserve’s two-day policy meeting, which began Tuesday, to see how Trump’s tariffs affect the central bank’s stance on interest rates and economic outlook, Reuters reported Monday (May 5).

A May PYMNTS Intelligence report, “Tariffs and Business Uncertainty: The Current State of Play,” found that companies are wary of what impacts tariffs could have, with most companies fearing changes to supply chains.

“Mid-sized companies widely expect supply chain disruptions and rising costs, and those fears increasingly appear justified,” the report said. “Major U.S. ports are sounding alarms about precipitous drops in import volumes, and Walmart, Target and Home Depot CEOs warned Trump of product shortages and higher prices.”

Despite the mounting uncertainty, some companies have forged ahead. Global Payments said April 17 that it is acquiring Worldpay from GTCR and FIS, and is also divesting its issuer solutions unit to FIS. The net purchase price for Worldpay is $22.7 billion, and the sale of the issuing business comes in at $13.5 billion.