Trump-led trade agenda looks lucrative to Washington law firms

Good morning and welcome back to White House Watch. In today’s newsletter we’ll cover:

• Why trade lawyers are having a moment

• Whether the president-elect can save TikTok

• What “Merger Monday” means for Trump-era dealmaking

Amid fierce debate about how exactly Donald Trump’s proposed tariffs will affect the global economy, there’s at least one clear winner: the Washington lawyers and accountants preparing to rake in a fee bonanza.

Businesses are clamouring for guidance on how to minimise any hit from Trump’s campaign pledge to impose levies of around 20 per cent on all imports and 60 per cent on those from China. And companies are willing to pay up for advice.

“We are getting a lot of new clients, a lot of new people approaching us,” said Nicole Bivens Collinson, managing principal at law firm Sandler, Travis & Rosenberg, which is looking at international expansion. Bivens Collinson added:

“I said to my colleagues — we’re bringing sexy back to trade.”

Much like in Trump’s first term, trade law and supply chain experts are expected to be in high demand as companies navigate complex national security laws, tariff exemptions and product classifications. Possessing the right information can make the difference in whether companies can afford to stay in the US market.

Some groups are investigating whether they can reclassify products to win lower tariff rates, while others are focused on reorganising their supply chains.

Accounting firms have also been selling clients advice on how to deal with customs officials and how to take advantage of what Mark Ludwig, head of national trade advisory services at RSM US, calls “under-appreciated” mechanisms for minimising tariffs.

To handle client demand, firms expect to staff up.

“It’s been busy since 2016, but I can tell you already that overnight it’s exploded,” said one trade lawyer for a major firm, who did not want to be named. “There is a lot of interest in suing the Trump administration, everyone around town is preparing a lawsuit.”

Team 47: who’s made the cut

Trump has named former senator and ex-Fortune 500 chief executive David Perdue to serve as ambassador to Beijing.

Venture capitalist David Sacks, an Elon Musk confidant, will be the White House’s artificial intelligence and cryptocurrency tsar.

Alina Habba, a defence attorney in Trump’s New York hush money case, has been named counsellor to the president. (AP)

Transitional times: the latest headlines

What we’re hearing

Dealmakers are riding high after $35bn in transactions yesterday provided the clearest sign yet of soaring sector confidence following Trump’s election victory. 

Before “Merger Monday” was over, four big transactions were announced including Omnicom’s $13bn all-share acquisition of rival advertising group Interpublic and Apollo Global-owned packaging manufacturer Novolex’s $7bn deal for Pactiv Evergreen.

Trump has promised to create a deal-friendly environment with a pro-business approach. The administration of President Joe Biden, in contrast, is known for its strict antitrust enforcement. Last year dealmaking sank below $3tn for the first time in over a decade.

With more than a month to go until the president-elect is sworn in, his rhetoric is already rippling across the industry. 

“Since the election results came in, my phone hasn’t stopped ringing. Clients who’ve been sitting on the sidelines for the past four years are suddenly eager to explore deals — even the challenging ones,” said Scott Barshay of Paul Weiss, one of Wall Street’s most prolific dealmakers. Barshay added: 

It feels like deal activity is about to take off in a major way.

With three weeks left to go in the year, deal activity is up 10 per cent compared with the same period a year ago, according to the London Stock Exchange. Analysts are bullish on the dealmaking trend heading into the new year.

“M&A is about having certainty,” said Anu Aiyengar, global head of advisory and mergers and acquisitions for JPMorgan. “While there is still geopolitical risk, having certainty coming out of the election is helpful.”

Viewpoints

• Does the president-elect see the fall of Syria’s Bashar al-Assad as good news, bad news or a matter of indifference? It is hard to say, writes Edward Luce.

• By pardoning his son, President Joe Biden has “normalised” two of the things that Trump has been most heavily censured for, writes Jemima Kelly.

• There are intellectual inconsistencies in the warnings that Trump’s deportation plans will create labour shortages, push up costs and increase inflation. Economists need to get their story straight, says Sarah O’Connor.

• The incoming Trump administration is thinking carefully about geopolitical shifts that the EU has yet to really grapple with. Europe must catch up quickly, warns Rana Foroohar.