Global M&A Revenue Falls as Global Deal Activity Disappoints under Trump’s Pursuit of Tariffs

Global M&A activity has fallen short of expectations as a result of the global trade war initiated by U.S. President Donald Trump. Data from Dealogic compiled for Reuters showed that first-quarter mergers and acquisitions volume rose by 12.6% to $984.38 billion compared to the previous year. This increase was primarily driven by the Asia Pacific region where significant state-run deals announced by China and a ports deal influenced by Trump nearly doubled M&A volume from the previous year.

Bankers worldwide are facing challenges in completing deals and are experiencing a decline in revenue generation. In the United States, which accounts for almost half of global M&A transactions, first-quarter volume decreased by 13% to $436.56 billion. While IPO activity saw a slight increase, a prolonged trade war was predicted to make future IPOs less appealing, according to Matt Witheiler of Wellington Private Investments.

The optimism for a strong 2025 in terms of deals and transactions that was previously anticipated by Wall Street executives and analysts has been dampened by the current market conditions. Expectations for deregulation, tax cuts, and pro-business policies under Trump have not materialized as expected, leading to a decrease in confidence in the M&A market. Many potential deals have been abandoned due to heightened uncertainty, and analysts have started revising earnings forecasts for major banks involved in M&A transactions.

The slump in M&A activity globally has led to a decline in investment banking fees and a 20-year low in deal totals for 2025. Analysts are concerned that a prolonged slowdown in deals could have lasting repercussions on the financial sector. Bankers are cautious about executing transactions with significant tariff exposure, and some Wall Street banks are contemplating job cuts if M&A activity does not pick up in the near future.

Despite the challenges faced by the M&A market, there is still room for optimism. Major deals such as Google’s acquisition of cloud security company Wiz and robust Asia Pacific IPO activity in March have provided a glimmer of hope for the industry. The burst of megadeals and active IPO activity in Asia and Europe has somewhat offset the slowdown experienced in the United States.

The uncertainty created by the global trade war and geopolitical events has impacted market volatility, hindering the success of IPOs. Companies and investors are seeking certainty to understand how their business models may be affected in order to appropriately price equity. Disappointing performances by major IPOs, such as Venture Global and CoreWeave, have added to the cautious sentiment in the market.

In conclusion, the global M&A market has faced challenges as a result of the trade war initiated by President Trump, leading to a decline in deal activity and revenue generation. While there are pockets of optimism, the market remains cautious due to uncertainties surrounding trade policies and geopolitical events. As the year progresses, the industry will closely monitor developments to gauge the potential for a rebound in M&A activity.