In this episode of Data Room, Corporate M&A Partner Neil Millar is joined by Partner and International Trade expert Sarah Salmond to discuss the recent United States tariff regime introduced by President Trump. They explore the global impacts of these tariffs, particularly on the M&A environment, and provide insights into how businesses can navigate this new landscape. 

[00:05] Sarah provides an overview of President Trump's tariff policies, which target countries like China, Canada, and Mexico, and specific products such as aluminium, steel, and automotives.

[00:28] Sarah explains the 25% import tariffs on these products and mentions investigations into timber, lumber, and copper. Neil and Sarah discuss "Liberation Day," a significant event in the tariff policy.

[02:17] Sarah describes the mixed global responses to the tariffs, including significant retaliatory measures from China and non-retaliatory stances from countries like New Zealand.

[03:48] Sarah covers the economic and political reactions, noting a global sell-off in equities and criticism from Republican lawmakers and financiers. Neil mentions the 90-day pause on reciprocal tariffs announced by Trump.

[04:34] Sarah details the current status of tariffs, including a 145% tariff on Chinese goods and a 25% tariff on Canadian and Mexican goods.

[05:33] Neil and Sarah discuss the impact of these tariffs on the M&A environment, noting a slowdown in global M&A activity and a 30% drop in United States M&A levels in the first quarter of 2025. Sarah explains how uncertainty affects business valuations and deal-making.

[07:29] Neil observes that domestic deals continue despite the tariffs, and Sarah highlights sector-specific impacts, particularly on high-end manufacturing, agriculture, and technology products.

[09:42] Neil questions whether New Zealand has a relative advantage with a 10% tariff, and Sarah discusses the complexities of the new tariff regime and the need for constant reassessment.

[11:26] Neil and Sarah discuss the potential for consolidation and opportunities for businesses with diversified export bases.

[14:09] Neil mentions opportunities for buyers in the current environment, and Sarah emphasizes the importance of flexibility and resilience in businesses.

[17:23] The broader impacts of America's trade policies on foreign investment in New Zealand are discussed, with Sarah noting the potential for backlash against American investments and the importance of non-controversial sectors.

[20:05] Neil questions the impact of Trump's policies on ESG investments, and Sarah describes mixed responses from American companies and the potential for continued global ESG standards.

[22:54] Neil and Sarah touch on the impact of tariffs on buyers and investors, emphasising the importance of due diligence and the potential for opportunities despite the challenges.

[27:21] Neil and Sarah discuss new due diligence requirements for buyers, including understanding supply chains and the resilience of target businesses.

Information in this episode is accurate as at the date of recording Friday, 11 April 2025.

Please contact Neil Millar or Sarah Salmond or our Corporate team if you need legal advice and guidance on any of the topics discussed in the episode.

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