Navigating M&A in Turbulent Times: Understanding the Current Landscape

In today’s complex and rapidly shifting M&A environment, business owners traditionally rely on established valuation metrics and market trends. However, given current geopolitical challenges, these conventional indicators appear less relevant for Canadian companies. To provide a clearer perspective, we have characterized today’s M&A landscape using the acronym TRUMP, reflecting current key market factors affecting deal-making and investment decisions.

T – Tariff Threats

The looming prospect of U.S. tariffs has created significant uncertainty for Canadian businesses engaged in cross-border transactions. Recently, the U.S. administration announced plans to impose a 25% tariff on Canadian and Mexican imports, alongside new tariffs of up to 20% on Chinese goods. These policies, driven by concerns over trade imbalances, border security, and the fentanyl crisis, add complexity to trade and investment strategies.

An executive order reviewing existing trade agreements suggests additional tariff measures may follow, including reciprocal tariffs set to take effect in early April. For Canadian companies, these trade barriers raise the cost of exporting goods to the U.S., dampening appetite for acquisitions, business expansions, and overall economic viability, particularly for firms heavily reliant on U.S. markets.