Impact of Trump's Tariffs and Drug Pricing Policies on U.S. Deal-Making in 2025

In 2025, the business landscape in the United States faced significant disruption due to President Donald Trump's trade policies, particularly his "Liberation Day" tariffs affecting over 180 countries. This uncertainty led to a notable slowdown in mergers and acquisitions (M&A) across various sectors, especially in consumer industries. According to a report from Boston Consulting Group, overall deal value in the consumer space dropped by 17% during the first three quarters of 2025 compared to the previous year. Executives expressed hesitance in making plans or offering guidance amidst the unclear implications of the tariffs, with KPMG partner Lenny LaRocca noting that the uncertainty "put a big pause on M&A in general."

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The automotive sector was particularly affected, experiencing a 19.9% decline in deal volume year-over-year, as companies grappled with parts shortages and a shift towards electrification. Ford Motor Company announced a $19.5 billion write-down related to its electric vehicle plans, reflecting the broader industry challenges. Despite these setbacks, LaRocca suggested that the need for consolidation could drive future deal activity as companies seek to adapt to changing market conditions.

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In the media sector, companies like Nexstar Media Group faced regulatory hurdles in pursuing acquisitions, such as its proposed $6.2 billion acquisition of Tegna, due to the Trump administration's cautious stance on broadcast consolidation.

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In parallel to the trade policies, Trump's administration also focused on lowering prescription drug prices, announcing agreements with major pharmaceutical companies including AbbVie, Bristol Myers Squibb, and Merck. These agreements aimed to implement "most-favored-nation" pricing for Medicaid, which has historically benefited from significant discounts. However, skepticism arose from Democratic lawmakers who questioned the transparency and effectiveness of these deals, suggesting they might not yield meaningful savings for consumers.

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Democratic leaders, including Frank Pallone Jr. and Richard E. Neal, criticized the lack of detail surrounding these agreements, demanding clarity on their implications for drug pricing and consumer costs. They highlighted concerns that the announcements could serve more to benefit Trump's administration than to provide real relief to American consumers.

Democratic Health Leaders Demand Answers on Trump’s Shady Drug Deals |

As 2025 progressed, deal activity began to stabilize, with Wall Street adapting to the new regulatory environment under Trump's administration. The biotech and pharmaceutical sectors saw increased middle-market transactions, driven by the need for larger companies to fill revenue gaps from expiring drug patents. While the overall deal-making environment remained cautious, analysts noted that many uncertainties had been largely "priced in," suggesting a potential for renewed activity in the coming year.

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• “With all that uncertainty around where things were going to land, I think it just put a big pause on M&A in general.” — Lenny LaRocca, KPMG Partner

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• “If volumes aren't growing, you can't sit still, you've got to think about what other deals you can do,” — Lenny LaRocca, KPMG Partner

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• “While President Trump has made misleading and false claims to the American public with rhetoric around lowering drug prices, in reality, actions taken by the Administration thus far have yielded little, and in some cases have raised prices for consumers,” — Frank Pallone Jr., Ranking Member, Energy and Commerce Committee

Democratic Health Leaders Demand Answers on Trump’s Shady Drug Deals |

This article reflects the complex interplay between Trump's tariffs and drug pricing policies and their impact on U.S. deal-making in 2025, highlighting both the challenges and adaptations within various sectors.

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