Will the Midterm Elections Change the Direction of U.S. Trade Policy?

The midterm elections delivered a pretty unmistakable political message. Democrats have won control of both the House and Senate, and the results suggest that many voters believe the Trump administration’s economic policies are moving in the wrong direction. Tariffs were not the only issue, but after nearly two years of aggressive tariff action, it is difficult to separate the result from public concern about affordability and higher costs. 

So how might that translate into real policy changes when Democratic majorities take control of the two legislative chambers in January? 

There are already signs that the administration may be moving toward reconciliation. U.S. Trade Representative Jamieson Greer is reportedly urging President Trump to resume trade negotiations with Canada, in part to avert another steep tariff increase threatened for Jan. 1. The White House has also confirmed that Greer and Commerce Secretary Howard Lutnick have been talking with their Canadian counterparts. 

The administration has already shown some flexibility by recently reshuffling the products subject to the 50 percent Section 338 tariffs. But Democrats have proposed going much further. Sen. Chuck Schumer’s End Trump’s Tariff Tax Act would terminate the Canada tariffs, provide refunds, and repeal Section 338 itself. That proposal was largely symbolic under Republican control; with Democratic majorities in the House and Senate it could now move through Congress, though it would still face a likely presidential veto. 

Canada may therefore be the earliest test of the post-election trade policy landscape: an administration looking for an off-ramp, and a Congress threatening the statutory authority behind the tariffs. 

The same Schumer bill would terminate the Section 301 forced labor tariffs imposed on 60 economies and refund those already collected. A Democratic Congress could also press USTR on whether broad country-wide tariffs are an effective response to forced labor. However, these tariffs remain an executive action and are also being challenged in court, so congressional action does not guarantee immediate relief. 

The Trump administration also still controls pending Section 301 investigations and the expanding Section 232 pipeline. Congressional Democrats can hold hearings, demand documents, use appropriations leverage, and advance legislation to narrow delegated tariff authority, but unless Congress can overcome a veto the president will retain substantial power to impose and modify tariffs. 

The midterms may not end the Trump tariff agenda, but they could mark the beginning of a more serious fight over its costs, its legal authorities, and the extent of presidential control over U.S. trade policy.