Tariffs Reloaded: Trump’s Trade Gambit and the M&A Domino Effect

According to our microsurvey, 47% expect significant supply chain disruption, while 32% see this as a spark for domestic sourcing acceleration. The rest? They're already hedged or pretending they are.

Let’s unpack this. Trump’s strategy is simple on paper: slap tariffs on any country that taxes U.S. goods unfairly. In reality, it’s a border tax bazooka aimed squarely at China, Europe, and Mexico, with collateral damage measured in spreadsheets and EBITDA projections. Manufacturing-heavy sectors (think construction materials, auto parts, and specialty insurance carriers insuring that same manufacturing base) could see input costs spike by double digits. For PE firms holding portfolio companies reliant on imported components, expect some short-term margin pain — and renewed urgency around reshoring operations.

On the flip side, this could be a catalyst for U.S. middle-market manufacturing roll-ups. Expect a fresh wave of bolt-ons and platform deals, as sponsors bet on onshore supply chains and try to pre-emptively reroute around tariff fallout.

Still, don’t expect a wholesale panic. A solid third of respondents flagged "limited impact," likely reflecting existing diversification plays and tariff-ready vendor agreements post-2018. For those with global footprints, lessons from the last tariff tango seem to be paying off.

Bottom line: PE sponsors and dealmakers should brace for turbulence, but keep their eyes on the prize. This isn’t just about surviving tariff headwinds — it’s about using them to catalyze M&A opportunities before valuations adjust. And for Corporate Development teams? Call your tax counsel and start drawing new org charts. Quickly.