Corporate uncertainty rises as Donald Trump's second term begins

While Trump’s second term promised business growth and market-friendly policies, the reality so far has been one of caution and hesitation.

Corporate leaders expected a business-friendly boost under Trump's second term, but regulatory hurdles, shifting trade policies, and slowing deal-making are fuelling economic uncertainty.

As US President Donald Trump’s second term gets underway, corporate leaders who once anticipated a business-friendly administration are now grappling with rising uncertainty.

According to The Wall Street Journal, expectations of an economic boom have been tempered by regulatory hurdles, trade policy shifts, and slowing deal-making activity. While some businesses still hope for lower taxes and deregulation, unpredictability around tariffs and antitrust enforcement is making long-term planning difficult.

Slow start for deal-making in 2025

January 2025 saw one of the slowest starts to deal-making in a decade, with fewer than 900 mergers and acquisitions (M&A) deals announced in the US, a sharp decline from over 1,200 in the same month last year. This drop reflects hesitation among investors and companies, as they navigate uncertainties in trade policy and regulatory actions.

A prime example of this new climate is the Justice Department’s recent decision to block Hewlett Packard Enterprise’s $14 billion acquisition of Juniper Networks. The move signals that despite Trump’s pro-business reputation, antitrust scrutiny remains high, creating a more challenging landscape for corporate mergers.

Uncertainty over trade policy

Adding to corporate unease is the administration’s shifting stance on tariffs. Trump’s announcement of a 25% tariff on steel and aluminium imports from Canada and Mexico, followed by a last-minute delay, has left executives struggling to make supply chain and pricing decisions.

Nick Pinchuk, CEO of Snap-on, captured the frustration of business leaders, telling The Wall Street Journal, "It feels like being on Space Mountain at Disney World—you're riding in the dark, not sure which direction you're heading next."

Many executives worry that sudden trade policy changes could increase costs and disrupt business operations.

Wall Street’s mixed reactions

Despite early setbacks, some corporate leaders remain cautiously optimistic. Investors hope that as the administration settles in, clarity on tax policies, deregulation, and trade agreements could revive business confidence. Private equity firms are also expected to play a larger role in deal-making later this year, once businesses adjust to the new economic landscape.

However, the unpredictability of Trump’s policy decisions continues to weigh on corporate America. With uncertain trade policies, regulatory challenges, and slowing consumer demand, businesses are adopting a wait-and-see approach before making major investments.

A year of volatility ahead

While Trump’s second term promised business growth and market-friendly policies, the reality so far has been one of caution and hesitation. With mergers slowing, trade conflicts looming, and regulatory scrutiny intensifying, companies are navigating a more unpredictable economic environment than many had anticipated. Whether corporate America can regain confidence in 2025 will depend on how the administration clarifies its economic policies in the months ahead.