Inbound M&A Deals: Adrift For Now?

As noted in our previous report, " 2016's Thriving M&A Market," this year has seen a continuation of the historically high trend of inbound M&A activity in the US. This is largely due to foreign investors' interest in a market that they view as stable and growing, especially compared to the fluctuating fiscal positions of developed countries in the EU.

However, with the unexpected results of the November 8 general election, projections concerning foreign direct investment (FDI) activity for the rest of the year and Q1 2017 are now askew. Our research indicated that investors were wary of candidates who identified with protectionist and populist sentiments, fearing that they would enact legislation to boost tariffs and drive up prices. Now that Donald Trump is the president-elect, we have decided to conduct a brief overview of his stated policies on trade and globalization. Our review will include a prediction of the FDI market in the US going forward, as well as what the recent election of populist, conservative candidates worldwide means for the global investing climate. We have also asked Joe Andrew, Dentons' Global Chairman and former chair of the Democratic National Committee, to contribute his unique perspective on the events that have unfolded.

Trump has made multiple remarks regarding reducing trade and globalization's influence in the US economy. The first of these is his stated plan to back away from the Trans-Pacific Partnership (TPP) trade deal. This deal would have connected 12 Pacific Rim countries via lowering tariffs and non-tariff barriers to trade, including penalties. Though the deal has yet to be agreed upon, Trump has stated that the TPP would weaken US manufacturers and would eliminate America's means of holding other countries accountable for subverting stipulations of trade agreements. As of this writing, a recent press conference featuring four ambassadors from TPP countries was canceled. Congressional leaders have refused to ratify the treaty during the remainder of President Obama's term. It is possible that the deal could be renegotiated, given that Trump has stated he would be open to doing so with NAFTA, but at the very least, the deal in its current iteration is not likely to pass.

In that vein, Trump has said in the past that he plans to scrap NAFTA completely upon assuming office. However, in his 60 Minutes interview on November 13, he amended this position by saying he would either end NAFTA or renegotiate...