CEOs grapple with trade and tariff uncertainty but imperatives for dealmaking remain

• 50% of global CEOs are very or extremely concerned about tariff impact and 44% are already exploring new sourcing and supply chain options
• Transformation drivers remain: 57% hope to pursue M&A in the coming year but many await clearer market conditions
• 55% see real value in recent deals, underpinning deal appetite resilience

While escalating market volatility due to shifting trade and tariff policies will likely delay investment decisions, the rationale for dealmaking prevails as CEOs take proactive steps to mitigate the impact and remain competitive. This is according to the latest EY-Parthenon CEO Outlook Survey,¹ which evaluates the views and optimism levels of 1,200 global business leaders at many of the world’s leading companies.

The survey finds that 98% of CEO respondents are concerned about tariff increases affecting their company’s operations and sales in the next 12 months, with 50% very or extremely concerned. Indeed, geopolitical, macroeconomic and trade uncertainty is cited as the top risk to achieving growth (42%), and 54% say they have delayed a planned investment as a result. But CEOs are responding proactively by rethinking global relationships: 44% of respondents say they are looking to adjust supply chain arrangements; 42% are exploring product design innovations to reduce reliance on tariffed materials; and 39% are relocating operational assets to a different geography.

The complexity of the current landscape is reflected in the fact that the most critical trading relationships are not always the closest or most locally significant, according to the survey. While 42% of Chinese respondents cite the US-China tariff and trade dispute as their primary concern, 8% are more focused on the US-Mexico relationship. This underscores the global interconnections and difficulty of navigating tariff challenges, particularly as other major economies react to potential US tariffs.This contrasts with a highly positive outlook for M&A in 2025 prior to the US administration’s tariffs announcement of 2 April this year, which culminated in US$1t of deals recorded during 1Q25 – up 25% year-on-year. With 57% of survey respondents hoping to pursue M&A in the next 12 months, the report indicates that pre-existing pressures – tech adoption and a talent squeeze key among them – will remain pent-up transformation drivers that will see CEOs return to dealmaking as the market settles.

Andrea Guerzoni, Global Vice Chair – EY-Parthenon, says:

“It is too early to tell what the impact of today’s tariff upheaval will have on M&A. CEOs and their executive teams are using a wide range of options available to retain competitive position. History also tells us that pursuing deals early in crises can unlock value for strategically positioned companies. The most successful CEOs will embrace the paradox of uncertainty: planning carefully, acting decisively, and shaping their futures with confidence. By balancing agility with discipline, they position their companies to emerge stronger and more resilient.”

M&A can drive transformation and deliver value in times of challenge

While reports of integration hurdles, cultural misalignment and overestimated synergies often lead to speculation around how much shareholder value is delivered post-deal, the survey tells a different story about the CEO experience. More than half of CEO respondents (55%) say their recent acquisitions met or exceeded value expectations, with only 2% reporting value destruction.

Guerzoni says: “With clear strategy, disciplined execution, and strong leadership, M&A remains a powerful lever for long-term value – unlocking synergies, preserving competitive edge, and driving growth well beyond short-term financial returns. The value driving potential of M&A underpins the resilience of deal-making appetite even in times of uncertainty.”

AI investment roadmap unclear as many CEOs look to cost reduction

Global CEOs report mixed results from artificial intelligence (AI) deployments to date, which may slow down implementation in a turbulent year.

While 36% of respondents say they plan to expand AI investments after positive results to date, 25% say they are “scaling back or reconsidering” AI investments due to “unclear or disappointing” returns. This may create pressure on AI deployments, as CEOs try to balance a cautious response to the current volatility with an ongoing demand to accelerate AI adoption and to upskill and hire talent for specialized roles in AI.

With nearly half of CEO respondents (42%) indicating that they are looking to absorb additional costs internal through operational efficiencies and cost reductions, many may be delaying tech investment pending more geopolitical certainty.

Also fuelling a renewed and likely growing focus on cost management is the challenge of inflation. Seventy-one percent of respondents agree that inflation continues to be a challenge and will be an issue they need to navigate for the next year, and many of those will be looking at opportunities to mitigate cost increases.

Guerzoni says: “CEOs realize that this new world will be less stable than the previous one. Beyond efforts to mitigate the current instability, we may see CEOs being bolder in their transformation and transaction strategies in the face of challenge. The response to recent crises shows clearly that acting now, rather than hunkering down to wait until the storm has passed, will create greater chances of creating long-term value for all their stakeholders.”

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About the survey

On behalf of the global EY organization, in March and April 2025, FT Longitude, the specialist research and content marketing division of the Financial Times Group, conducted an anonymous online survey of 1,200 CEOs from large companies around the world that aims to provide valuable insights on the main trends and developments impacting the world’s leading companies as well as business leaders’ expectations for future growth and long-term value creation.

Respondents represented 21 countries (Brazil, Canada, Mexico, the United States, Belgium, Luxembourg, the Netherlands, France, Germany, Italy, Denmark, Finland, Norway Sweden, the United Kingdom, Australia, China, India, Japan, Singapore and South Korea) and five industries (consumer and health; financial services; industrials and energy; infrastructure; technology, media and telecoms). Surveyed companies’ annual global revenues were as follows: less than US$500m (20%), US$500m–US$999.9m (20%), US$1b–US$4.9b (30%) and greater than US$5b (30%).