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Publication Date

5-7-2026

Document Type

Comment

Abstract

“If there’s one thing that’s certain about life, it’s uncertainty.” It’s closing day for a deal. Executives, lawyers, and advisors surround the boardroom table. Diligence is complete, financing is secured, and the goals of the buyer and target are aligned. Then, a midnight executive order rolls through, imposing a 10% tariff on half the target’s supply chain. Uncertainty ensues. Negotiations stall. The deal does not close.

The rise of trade-related uncertainty has become a significant disruptor in mergers & acquisitions (“M&A”) and private equity (“PE”) transactions. Uncertainty impedes the flow of strategic transactions in the M&A and PE markets by undermining reliability and discouraging risk-taking behavior. Uncertainty introduces immeasurable friction in dealmaking, particularly when generated through irregular executive action. In the face of this friction, lawyers must be prepared to mitigate a client’s risk through strategic negotiations on key points like valuation, financing, and drafting adaptive deal documents.

The market, however, depends on risk-taking behavior to thrive. Key actors are more willing to take risks when the limits of uncertainty are quantifiable. But when uncertainty becomes too unpredictable—what is labeled as “uncertain uncertainty”—appetite for risk declines. The threshold for tolerable uncertainty ultimately shapes decision-making, sometimes even more than the lure of opportunity itself.

Those operating in the thick of this uncertainty are searching for clarity. Litigants have asked the Supreme Court of the United States to define the scope of executive tariff authority, a decision that may influence the parameters for risk-taking in the deal market for years to come. In this context, lawyers, businesses, and courts must be prepared to play their role in managing and allocating uncertainty across these new landscapes.

This Article proceeds in two parts. First, it provides background on the M&A market and trade policy. It traces the evolution of the M&A market through seven historical merger waves. It then turns to trade policy, with a particular focus on the statutory authority that empowers executive imposition of tariffs and a summary of the recent executive action that has reshaped the modern trade policy environment. Second, it evaluates the implications of the evolving trade policy landscape in the deal market, examining these effects from three integrated perspectives: (A) the role of a deal team in managing risk during the deal process; (B) the role of businesses viewed through the lens of how behavioral economics shapes decision-making; and (C) the role of the courts in the judicial review of executive trade policy actions. Together, these parts illustrate the multifaceted adaptations involved in navigating the modern dealmaking environment.

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