As 2025 progresses, uncertainty continues to dominate global markets and the business landscape, according to John C. Dugan, Chair of the Board of Directors at Citigroup.
“I think uncertainty is the right word,” he said, speaking at a fireside chat with Christine Romans, Senior Business Correspondent, NBC News at FIA Boca on Tuesday, March 11.
“Post-election, I think a lot of us in the business world were euphoric about the animal spirits coming back, markets being really energized by anticipating a really busy 2025. But that has given way to a significant amount of uncertainty as a result of the tariff announcements and the like.”
One of the most pressing concerns for businesses worldwide is the potential for a new protectionist era in the United States. The current administration has signaled a shift away from the globalization efforts that have defined the past 80 years of U.S. economic policy. Instead, there is a renewed focus on domestic manufacturing, restricted trade, and controlled borders.
But is it truly possible to dismantle globalization? Dugan believes that while global trade dynamics may shift, the fundamental nature of international commerce will persist.
“I guess what I would say is sure, it’s possible to have a significant impact on global trade, to change the trade corridors, but I do not think it’s possible to go back to a world where there’s virtually no trade between nations,” he explained. “And I think, honestly, that’s not exactly what they want to do.”
Citigroup, as one of the most globally integrated banks, is uniquely positioned to adapt to these changes. With operations in 100 countries and the ability to work with 144 currencies across 80 trading floors, Citi is prepared to help businesses navigate evolving supply chains and regional trade adjustments.
“The reality is, people shift from being extremely global to more regional, and those are places where we operate. We have businesses, and we do a lot with supply chains. So we’ll help people rearrange their businesses,” Dugan said. “I think that’s more likely than to have something completely shut down.”
Regulatory Recalibration: A Post-Crisis Inflection Point
The shifting regulatory environment is another key area of focus for business leaders. The aftermath of the 2008 financial crisis saw a dramatic increase in banking regulations, but recent developments suggest a recalibration may be underway.
“I do think it is an inflection point,” Dugan noted. “Post-financial crisis, there was a natural swinging of the pendulum to have a lot more regulation of banks and the banking system. And that was just a never-ending series of things going on—understandable, but in my view, it’s gone too far.”
Events such as the Silicon Valley Bank collapse have reinforced the resilience of large financial institutions, like Citigroup and its competitors, further supporting the argument for regulatory adjustments.
“What happened in the last five years or so—there have been a series of issues, like what happened with Silicon Valley Bank, which was bad for them but actually showed that larger banks fared very well because they were much stronger, much more resilient,” Dugan explained.
As the new administration takes shape, there is an opportunity to recalibrate financial regulation. While some discussions have centered on consolidating banking regulators, Dugan remains skeptical about the feasibility of such efforts.
“People have been talking about consolidating the regulator system that we’ve had for many, many years. We used to say, ‘It doesn’t work in theory, but it does work in practice.’ And I’m not so sure that’s actually true anymore,” he said. “There’s a lot of redundancy in the system.”
Instead of consolidation, the administration appears focused on streamlining regulatory coordination through the Treasury Department and the Office of Management and Budget (OMB)—a move reminiscent of past regulatory structures.
The current uncertainty has also impacted the mergers and acquisitions (M&A) landscape. At the start of 2025, expectations were high for a strong year in deal-making. However, the evolving trade policy environment has led to a pullback.
“It’s fair to say we were more optimistic coming into this year than we are right at this moment,” Dugan admitted. “The activity in the first part of the year has been less than what we had anticipated.”
The key factor driving M&A trends is not just the content of policy decisions but the need for clarity. Businesses need a stable foundation on which to base their strategic moves, and until the administration’s trade policies take concrete shape, many companies are opting to wait.
“It’s almost less about what they actually decide than actually reaching decisions that people can count on and figure out and plan around,” Dugan explained.
From a global perspective, America’s evolving economic stance has left international business leaders uncertain about the future. During his recent travels to Paris and Davos, Dugan observed a growing concern among European businesses regarding their competitive position in the global economy.
“The perception among European businessmen is that they’re still very frustrated at what is perceived to be a much even higher level of regulation that’s imposed on European businesses, really causing them to fall behind the rest of the world,” he said.
At the same time, the appeal of the U.S. market remains strong, as foreign investors see America as a more attractive destination for capital. However, geopolitical tensions and policy unpredictability are prompting European governments to reconsider their economic strategies.
“What’s interesting is that since then, when you see what Germany did with blowing through its debt caps, it is an indication that they’re really doing some very significant change because of what’s happening geopolitically,” Dugan noted.
For Citigroup and other financial institutions, flexibility remains key. Whether the trend is toward globalization or regionalization, strong financial institutions will play a critical role in helping businesses restructure and thrive in this evolving environment.
“We’re waiting for the dust to settle,” Dugan said. “And at the same time, very much watching what’s happening in the market.”
