Weathering the Storm: M&A in a Time of Tariff Uncertainty

As geopolitical tensions escalate and global economic signals remain volatile, dealmakers are recalibrating their strategies. U.S. tariffs introduced in April under the second Trump administration are injecting fresh uncertainty into the global economy, shaking investor confidence and stalling momentum. While dealmakers await clarity on U.S. trade strategy — and weigh the potential upside of delayed interest rate cuts against the risks that come with inflation — deal timelines are getting stretched and many transactions are being delayed.

The just published Q2 2025 SS&C Intralinks Deal Flow Predictor — our quarterly M&A prediction of global and regional activity based on early-stage transactions made on the Intralinks platform — explores the regions and industries poised for strong deal flow in the next six months, despite broader market hesitation.

U.S. and global deal flow: what comes next

Although global dealmakers expressed optimism at the beginning of the year — 87 percent said they expect M&A and financing activity to grow in 2025 — tariffs have introduced new economic pressures, setting the stage for a highly unpredictable dealmaking environment.

In the U.S., pre-announced deals staged on the SS&C Intralinks platform indicate mixed performance for the next six months, with Canada and the U.S. both expected to experience neutral trends. Globally, our proprietary data shows deal activity has picked up modestly, but regional divergence remains stark.

Europe is seeing uneven recovery amid ongoing regulatory tightening and political shifts but factors like Germany’s recent election could drive economic revitalization. Early-stage initial public offerings (IPOs) data is trending toward overperformance for France and Spain, whereas Italy and the U.K. might see neutral or weak activity. Latin America is starting to rebound after three consecutive years of declining deal activity, with Brazil and Argentina driving early momentum. Asia Pacific (APAC) is where some of the more compelling stories are unfolding. Pre-announced IPOs on our platform show APAC is taking the lead, with China, Japan and Australia accelerating the velocity of transactions in the region.

China’s stimulus-led rebound; Japan’s M&A boom

China’s M&A activity seems to be gaining momentum, aided by a new wave of stimulus measures and a push to bolster consumer demand. As companies accumulate cash reserves and look for growth, our data reveals that M&A activity in the country is starting to rebound, even amidst U.S. tariffs.

Meanwhile, Japan is experiencing a notable surge in deal flow. As domestic companies face an aging population and limited growth prospects at home, many are turning to cross-border acquisitions to fuel expansion. Recent high-profile negotiations in the automotive sector between Nissan and Honda, as well as Nippon Steel’s USD 14.9 billion bid for U.S. Steel, highlight Japan’s growing appetite for transformative dealmaking.

But it’s not just about external deals. Japan’s historically low interest rates, coupled with local regulators’ push for corporate governance reforms aimed at improving efficiency and creating value, have fueled a wave of restructurings, divestitures and strategic realignments. (Read our report’s analysis of Japan’s M&A surge here.)

AI-driven M&A: Healthcare leads the charge

In a global market shaped by volatility, one area that continues to draw investor interest is artificial intelligence (AI). Certain sectors that sit at the intersection of innovation and operational value are offering a glimpse into where the next wave of smart dealmaking could unfold. The healthcare industry is particularly well-positioned for strong deal flow in 2025 as investors look for growth stories that transcend short-term macroeconomic headwinds. AI-driven healthcare innovations in diagnostics, patient monitoring and back-office operations, for example, will be especially attractive to investors as they not only promise efficiency but also offer a scalable impact.

Looking forward

While uncertainty around interest rate cuts, tariffs and potential inflation resurgence continues to cast a shadow over the M&A landscape, one thing is certain: Pressure is mounting on private equity (PE) firms to put undeployed capital to work. With record levels of dry powder, PE funds are facing growing expectations from limited partners (LPs) eager for returns. This urgency is likely to accelerate deal activity in targeted sectors like Finance and Healthcare, sparking regional bursts of momentum even amid broader volatility. In this climate, dealmakers won’t just need conviction, they’ll need clarity on where momentum is building and where the next viable opportunities are beginning to take shape. Once that clarity comes into focus, the stage is set for a resurgence in dealmaking activity.

For an in-depth analysis of expected global and regional M&A activity in the next six months, early-stage IPOs and restructurings, read our data-driven forecast in the SS&C Intralinks Deal Flow Predictor for Q2 2025 — available now.