One big thing – Business takes a seat at the negotiation table

Policy and Politics: Get ahead of a fast-moving political environment with this quick read on one big thing to watch in the month ahead coming out of Washington, DC.

It’s been six months since President Trump’s announcement on “Liberation Day” sent shock waves through corporate America and markets. In the time since, the US administration has struck deals with major trading partners, mostly lowering tariff rates from the highs threatened in April. However, negotiations are still ongoing with India and China, and the US–Mexico–Canada Agreement is due to be renegotiated in 2026. 

Notably, it has also become clear in recent months that the administration plans to extend its dealmaking further, engaging the private sector to broker agreements that advance certain policy goals.

These deals are likely to be an ongoing feature of this administration, not an exception. Following the government’s announcement to take a nearly 10% stake in Intel, President Trump himself took to social media to suggest that he could ‘make deals like this all day long.’

Similar to Trump’s trade deals, the details of joint actions with business  are not always readily apparent. And initial market moves haven’t been uniformly positive or negative. This is because there are myriad factors that impact the overall financial outlook for a company, with US policy being just one of them.

Takeaways

• The White House has made several announcements with businesses seeking to draw a connection between the terms of agreements struck and their stated policy goals, for example, lowering drug prices or retaining a competitive advantage in artificial intelligence (AI). 
• There are many factors that impact a company’s performance. The types of deals between the Trump administration and businesses are, in large part, new – and this captures attention. However, the same principles that have always guided valuations hold true – business fundamentals, economic conditions, and many other factors are all relevant. 
• Political pressures change as elections near; if the economy is performing well, expect Republicans to draw nearer to the White House’s approach, the opposite will be true if the economy takes a downward turn. 

Artificial intelligence: export controls and investments

In support of the stated goal of developing domestic AI capabilities, the White House announced that the federal government would take a stake in Intel amounting to 10% of its value. Shortly after, Nvidia announced its own investment in Intel. In the month after these announcements, Intel’s stock was up some 50%.

In April 2025, the Trump administration banned exports of Nvidia’s H20 chips to China over concerns that the technology could strengthen Beijing’s defense industry. It lifted the ban in July and, in August, announced that sales of modified chips to China could continue but that Nvidia and AMD would pay 15% of that revenue to the US government.

Nvidia and AMD’s stocks were little changed immediately following this announcement. On the one hand, AI faces some headwinds, for example Chinese companies have announced major progress on their AI builds using older mid-range chips. And in September, China’s regulator ruled that Nvidia’s acquisition of Mellanox in 2020 violated its anti-monopoly law. But it also faces major tailwinds, with Nvidia’s stock continuing to climb and AMD’s soaring in response to a deal struck with Open AI in October.

Taken together, the tech sector demonstrates that US policy is not the only factor in a company’s outlook, but it can help to form a supportive (or unsupportive) environment.

Pharmaceuticals: lowering prices and increasing manufacturing

In April, the administration launched a trade investigation into pharmaceuticals, potentially paving the way for sectoral tariffs later in the year. It also announced plans to enforce a ‘most favored nation’ (MFN) pricing policy where American consumers pay no more than those in other developed countries.

Following the conclusion of the trade investigation, the President announced on social media that 100% tariffs would go into effect across the pharmaceutical sector on October 1. However, tariff action was delayed  off the back of a deal brokered with Pfizer and with the prospect of further deals following.

In its deal, Pfizer agreed to three main things to: (i) launch future drugs at the same price in the US as they do in other developed countries; (ii) sell drugs at MFN prices to Medicaid; and (iii) participate in a direct-to-consumer platform, called TrumpRx, selling medicines at a discount.

Pfizer also committed to an additional $70 billion investment to onshore drug manufacturing production and R&D over the next few years. In return, Pfizer will receive a three-year reprieve from sectoral tariffs. After the deal was announced, Pfizer’s stock rose nearly 7% and other pharma names saw an increase as well.

The White House has called on other companies in the sector to negotiate their own deals, but many of the terms of the Pfizer deal are confidential. Each company will have their own considerations to navigate as some are more exposed to Medicaid, while others are approaching major patent cliffs and so could be more likely to participate in a direct-to-consumer play. Until terms are agreed upon, it will be hard to evaluate whether the deals will ultimately prove a tailwind for each firm or if they will be a drag.

Polling and the midterms

In the early days of the second Trump administration, Republican Members of Congress have been reticent to publicly criticize any White House move given the party’s complete win in 2024 largely attributed to his role as party leader. 

But at the moment, the economy is a particularly weak issue for President Trump. A RealClearPolitics average of polls shows his approval on the economy at net negative 14%, and on inflation at net negative 22%. 

Tariffs, taxes and these business deals will all be on the minds of voters in 2026. Whether or not Trump’s approach to the economy becomes a part of the Republicans’ or Democrats’ election playbook depends on how voters see their personal circumstances and the economy more broadly as they head to the polls in November 2026.

In other news:

• Congress did not pass funding by the end of the fiscal year, leading to a federal government shutdown. Democrats in the Senate voted against taking a vote on a Republican-supported clean funding patch until November 21 in the hopes of forcing Republicans to negotiate on health care tax credits that expire at the end of 2025. However, Republicans pushed back, suggesting these credits could be discussed later in the year. The standoff shows no signs of softening as of this writing, but pressure could begin to mount if Americans feel a disruption to services. For example, the 2018–2019 standoff became harder for lawmakers politically when the airports experienced significant delays from an understaffed TSA.  
• Special elections to fill Democratic vacancies in Virgina and Arizona are now completed, securing these seats for the minority party. This brings House margins to 219 Republicans and 214 Democrats. Two more vacancies will be filled this fall in Texas and in Tennessee – these will likely go as expected and preserve the two-seat majority for Republicans, bringing the margins to 220–215 seats. These tight margins obviously make it challenging to pass legislation with little room for dissent.