Dealmakers are struggling to make sense of Trump’s antitrust policy

A huge deal just received the greenlight from bank regulators.

In another world, Capital One’s $35 billion acquisition of Discover getting the go-ahead would be a bullish signal for mergers and acquisitions. But, given a lack of big deals so far this year, dealmakers have yet to make complete sense of the Trump administration’s stance on antitrust regulation.

President Trump’s tariff war and his threats to fire Fed chief Jerome Powell are the main overhangs on the markets, chilling dealmaking into April. Still, dealmakers say uncertainty about approvals will persist even if the market calms down.

Andrew Ferguson, chair of the Federal Trade Commission, told an audience of executives and dealmakers in Washington, D.C., this month that he doesn’t believe corporate America should return to an “open season” for M&A. He said his job is to ensure that big companies—and big tech firms in particular—don’t “inflict injuries on ordinary Americans and on their families,” according to a recording of the conversation.

The appearance has rattled some dealmakers, especially since Ferguson and the head of the Justice Department’s’s antitrust division, Gail Slater, had skipped an annual spring gathering of antitrust professionals to instead address a separate event.

“They gave an articulation that while they’re not anti-M&A per se, they believe that competition on the merits is important,” said Josh Tzuker, a former DOJ antitrust official who works for communications firm FGS Global and helped coordinate the event.

Regulators OK’d Capital One’s acquisition of Discover, but dealmakers say there is uncertainty about approvals in general.

Big deals are missing

Many on Wall Street predicted that enforcement would lighten up and had blamed the Biden administration and former FTC chair Lina Kahn for chilling volumes.

But dealmakers are still adjusting to the new faces. And pressure on tech giants Google and Meta Platforms about the tactics they used to grow, including deals, isn’t helping.

In February, for the first time in 25 months, no deal valued over $10 billion was announced globally, according to data from LSEG.

Two sizable deals in the U.S. were announced in March: Google’s $32 billion deal for cybersecurity startup Wiz, and private-equity firm Sycamore’s takeover of Walgreens Boots Alliance. And Global Payments said it would acquire Worldpay for over $24 billion this past week.

But April remains quiet, with deals in the U.S. down 1% by value and down 45% by number this month through Monday, compared with last year.

“At the beginning of any new administration, firms are going to be trying to understand the landscape they are dealing with, and so it’s not uncommon for there to be a lull in merger activity that would carry antitrust implications,” said Jon Orszag, a deal adviser who also previously counseled President Clinton on economic policy.

Orszag, who recently helped launch Econic Partners to focus on antitrust issues around dealmaking and other policy matters, expects deals to pick up later this year assuming greater certainty emerges around U.S. tariff policy. Earlier this month, Econic hired Mark Israel, former president of consultant Compass Lexecon, bulking up its ranks.

“How the new administration will implement antitrust policy will become more clear over time and that will provide more certainty to businesses,” Orszag said.

Finding a remedy

Deals including the Wiz transaction should offer a test case. Dealmakers also say they expect the Trump administration will be more flexible when it comes to finding solutions to finalize big mergers.

“Both agencies should be more open to remedies, which should give deal planners more options in trying to get deals done than in the prior administration,” said Damien Zoubek, co-head of U.S. M&A for the law firm Freshfields.

Remedies—often shedding assets—are offered by companies in deals in hopes of addressing any concerns regulators have about consolidating powers.

Slater told the crowd in D.C. earlier this month that the DOJ isn’t going to hear any “b——- consent decrees,” however. She mentioned two rental-car companies a decade ago that agreed to divest a business in order to seal their merger. Months after the deal, the sold-off business was bankrupt. (She didn’t say the names but that describes Hertz’s acquisition of Dollar Thrifty.)

DOJ officials under Biden had told bank regulators they had concerns about Capital One’s deal to acquire Discover Financial, especially how the deal would affect borrowers who were new to credit, according to people familiar with the matter. But under the Trump administration, the DOJ determined that wasn’t enough to block a deal, the people said. Bank regulators issued conditional approvals last week.

Write to Lauren Thomas at lauren.thomas@wsj.com