Merger Review in a Trade War: ABA Antitrust Spring Meeting 2026 Panel

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Program Overview. At the 2026 ABA Antitrust Spring Meeting, the Economics, International, and Mergers & Acquisitions Committees presented a timely panel on “Merger Review in a Trade War.” The conversation focused on how rising trade tensions and shifting geopolitical dynamics are reshaping core elements of merger analysis—from market definition and the assessment of effective competitors to modeling price elasticities, efficiencies, and remedies. The following article summarizes the discussion.

The session was moderated by Robel Sahlu (Blake, Cassels & Graydon LLP) and featured Katherine Larkin‑Wong (DoorDash), Fiona M. Scott Morton (Yale School of Management), Meghan Rissmiller (Freshfields LLP), and John M. Yun (George Mason University).

Deal Activity and Timing

The panel opened with how tariffs and broader trade policy frictions are influencing deal activity and timing. From the dealmakers’ vantage point, panelists did not see tariffs themselves suppressing overall M&A activity. Ms. Rissmiller noted that while trade policy is one factor in risk assessment, it has not, in isolation, caused widespread delays or accelerations.  That said, geopolitical headwinds are changing who pursues which assets and why. Ms. Rissmiller pointed to two recurring patterns: i) Non‑U.S. buyers seeking U.S. targets to deepen an American footprint; and ii) U.S. buyers reducing exposure to ex‑U.S. supply chains via vertical integration or acquisitions that expand a domestic manufacturing base.

On timing, Ms. Larkin‑Wong observed that some deals do speed up while others wait out uncertainty, but the core in‑house risk assessment work remains the same. In an era of rapidly changing policies and geopolitical conditions, she stressed the importance of a consistent global narrative that can be adapted without contradiction to different agencies’ priorities.

Stepping back from individual deals, Dr. Scott Morton observed that uncertainty created by trade frictions dampens productivity in the U.S. Volatility encourages managers to defer investments or adopt higher‑cost workarounds—eroding choice variety and raising costs in the interim.

Market Definition Under Trade Frictions

How do trade tensions shape relevant‑market analysis? The doctrine hasn’t changed, but the facts on the ground have. As Ms. Rissmiller emphasized, arguments about foreign constraints must be evidence‑driven: for example, parties need to show that imports actually enter at meaningful volumes, satisfy qualification requirements, and win sales, rather than merely asserting availability. Beyond geopolitics and trade policy, practical frictions—product quality, time‑in‑transit and reliability, customer preferences, and vendor/plant qualification—can each affect the set of plausible substitutes and, therefore, affect how agencies define markets.

From an economist’s perspective, Dr. Scott Morton framed the shift succinctly: conceptual toolkit remains intact, but the borders of relevant markets shrink when foreign substitutes become costlier or less reliable. While the economic framework does not change, the distribution of shocks (their frequency and magnitude) is harder to parameterize which complicates forward‑looking assessment. The practical implication is such that higher concentration and fewer credible substitutes tend to make horizontal mergers harder to clear—though some vertical combinations (e.g., acquiring local manufacturing to de‑risk supply) can strengthen resiliency arguments.

Reassessing “Effective Competitor”

The panel next turned to what economic evidence best demonstrates that foreign competition still matters. Dr. Yun emphasized that tariffs do not eliminate competition; they change the margin on which competition is assessed, so parties should anchor their claims in standard, testable analytics. In particular, he pointed to post‑tariff diversion and sales responses—what customers actually did after tariff or other shocks—as a powerful way to sharpen diversion estimates; to capacity adjustments by foreign producers—whether they shifted, retracted, or repurposed capacity and thus remain actual or potential constraints; and to buyer usage patterns—including whether foreign suppliers are primary or secondary sources, and the extent to which long‑term relationships and dual‑sourcing preserve competitive pressure even under trade frictions.

Ms. Larkin‑Wong underscored that facts and documents still matter: trade‑policy changes do not alter what agencies require as proof; they simply heighten the need to substantiate assertions about foreign constraints with concrete, deal‑specific evidence.

Responding to how economists and dealmakers should reassess who qualifies as an effective competitor under shifting tariffs, Dr. Yun cautioned that tariffs inject uncertainty and that uncertainty could reshape the diagnostics used to evaluate competitive effectiveness. He suggested looking for: (i) evidence of domestic entry that could offset some tariff‑induced harm; (ii) integration advantages—incumbents may capture greater share if they are better positioned to vertically integrate, potentially leading over time to higher concentration; (iii) whether suppliers in lower‑tariff jurisdictions can credibly expand and discipline prices; and (iv) changes in foreign suppliers’ production incentives, including decisions to move manufacturing closer to end markets. While such moves are costly, for some firms they may represent the most durable strategy under ongoing trade frictions.

Diligence in a Tariff‑Exposed World

While the fundamentals of in‑house work haven’t changed, Ms. Larkin‑Wong outlined a tighter, trade‑aware playbook. She emphasized treating supply‑chain resilience as a first‑order inquiry—mapping supplier geography, alternatives, and qualification—then costing realistic de‑risking paths, especially where tariff exposure is acute. She advised testing organizational impact early through cross‑company conversations, since tariffs can ripple into functions that typically sit outside antitrust or strategy. On tariff pass‑through, she recommended bringing an economist into the deal early and front‑loading data work to gauge whether—and how quickly—costs are likely to reach customers. She also underscored keeping a single, coherent narrative that adapts across agencies and pairing every identified risk with a concrete mitigation plan.

Modeling Challenges and Efficiencies Arguments

Responding to how trade barriers and supply‑chain realignments affect price elasticity and merger modeling, Dr. Scott Morton noted that many efficiency claims hinge on eliminating duplicative activity, but when the merging supply chains face different shock profiles (e.g., wars, pandemics, earthquakes, tariffs), the best‑case scenario can diverge materially from a shock‑exposed reality. “Friend‑shoring,” for example, may reduce war risk but not pandemic risk; where the shock is located in the model—and how its frequency and magnitude are distributed—therefore matters. These issues are fully amenable to standard consumer‑welfare modeling: parties can present a best‑case and a shock‑exposed scenario that likely pull in opposite directions, giving regulators a structured basis to assess robustness.

Dr. Yun agreed that alongside the usual margin and diversion analyses, parties should present multiple scenarios—a no‑shock baseline, a large‑shock case, and an intermediate case—and then ask whether the direction of results changes. If outcomes point the same way across scenarios, new trade frictions are less likely to be dispositive. Dr. Scott Morton also noted that, because the U.S. import share is relatively modest in many markets, trade shocks will not be first‑order in most U.S. mergers unless the affected input is a large portion of costs. By contrast, the effects can be more pronounced in Europe and elsewhere. Still, she cautioned that tariffs, uncertainty, and other barriers generally shrink markets, reduce the availability of substitutes, and dilute claimed efficiencies.

On efficiencies, Dr. Scott Morton’s guidance was to make sure the theory of efficiency matches the world you are entering. If the claimed gains hinge on trade, resilience, or substitutability, then the modeling must reflect those drivers—timing, exposure, and propagation of shocks—not an idealized steady state. In short, align the narrative with the modeled mechanics: show how (and how quickly) efficiencies survive the plausible shock paths, not just the best‑case scenario.

International Divergence, Remedies, and Policy Objectives

The discussion closed by “zooming out” to the multi‑jurisdictional reality of merger review in a trade‑war environment. Across jurisdictions, FDI reviews now rival or even exceed merger‑control timelines on some transactions. According to Ms. Rissmiller, parties increasingly confront national‑security and industrial‑policy considerations that can sit uncomfortably alongside consumer‑welfare analysis. Rhetoric that plays well in one country might backfire elsewhere when those same documents are reviewed by a different authority.

As geopolitical pressures diverge, Dr. Scott Morton suggested that parties may need to consider greater structural separation by geography or line of business, allowing each jurisdiction to get a governance and compliance posture aligned to its objectives—albeit at material cost, as Ms. Larkin‑Wong warned.

On remedies, panelists anticipated a shift away from “one-size-fits-all” global packages toward more bespoke, jurisdiction‑specific solutions. This could include targeted divestitures, localized data or infrastructure commitments, and, where necessary, stand‑alone entities designed to satisfy conflicting regulatory objectives across regions.

The panel also addressed whether protectionist policy objectives are becoming more embedded in merger review. The consensus view was that while such considerations may be unavoidable in parallel processes (especially FDI), antitrust’s comparative advantage remains predictable, evidence‑based consumer‑welfare analysis. Importing broader policy goals directly into merger control risks uncertainty and difficult line‑drawing; parties should therefore keep the antitrust case anchored in measurable competitive effects and facts, even as other review tracks evaluate national‑security or industrial-policy concerns.

Closing

In closing, the panelists’ practical takeaway for deal planning was consistent: plan early and prepare thoroughly. Deal teams should assume risks are more acute, narrative coherence across jurisdictions is harder to sustain, and remedies may need to be tailored market‑by‑market. Ultimately, despite heightened volatility, the panel’s bottom line was steady: the analytical playbook endures, but the inputs and their variance have changed. Parties that front‑load data, test robustness across scenarios, and anticipate multi‑gatekeeper remedies will be best positioned to navigate merger review in today’s trade‑war environment.

Endnotes

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Committees

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• Economics Committee

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