Trade, Tariffs and the Midterms: 3 Things Business Leaders Should Watch

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APCO kicked off its 2026 midterm election webinar series on September 16 with a wide-ranging discussion on trade, tariffs and the political dynamics shaping the run-up to Election Day. The session, the first in a series designed to help organizations navigate the policy and political landscape ahead of the midterms, brought together APCO’s government relations and trade policy experts for a candid look at what companies should actually be watching over the next several months, rather than simply who is polling ahead.

What Washington Control Won’t Change

The panel’s central message: even a change in control of Congress will not fundamentally redirect the administration’s trade agenda. A Democratic-controlled House could bring aggressive oversight, subpoenas and investigations, and Congress could use the appropriations process to slow implementation, such as adding reporting requirements or restricting agency spending on certain tariff actions. But without a veto-proof majority, the executive branch retains broad statutory authority over tariffs. The practical effect of divided government, the panel agreed, is more friction and unpredictability rather than a reversal of course.

On the agency side, the panel flagged three bodies to watch closely: the Office of the U.S. Trade Representative (USTR), which is pursuing market-access deals and recently opened public comment on its next National Trade Estimate report; the Department of Commerce, which is developing mechanisms to trade tariff relief for documented investment commitments in manufacturing; and U.S. Customs and Border Protection, which has issued an advance notice of proposed rulemaking aimed at tightening enforcement for importers. Companies with import exposure were encouraged to engage with these processes directly rather than wait for final rules.

The Global and Political Crosscurrents

That unpredictability was a recurring theme. Panelists pointed to a shifting global trade landscape, including Canada’s move toward closer alignment with the European Union, as a sign that other countries are forming alternative trade and economic relationships that could leave U.S. businesses on the outside looking in. Domestically, affordability has become the lens through which trade policy is being debated, with tariffs increasingly linked in political messaging to the cost of goods, healthcare and education. The panel noted that this is not a straightforward partisan divide: several Republicans have also broken ranks on specific tariff votes, particularly those affecting Canada.

Canada drew particular attention. The panel described the U.S.-Canada relationship as strained, with a proposed reduction in aluminum tariffs derailed in part by pushback from domestic aluminum producers concerned about a cascading effect on rates for other trading partners. The panel expects a deal to remain elusive in the near term, with renewal of the U.S.-Mexico-Canada Agreement more likely to land sometime next year, ahead of its scheduled review. Panelists also pointed to Michigan, Ohio and Maine as states with economies closely tied to Canada, where tariff-driven disruption could resonate in competitive races regardless of party.

India came up as another area where progress has been slower than expected. A framework agreement removed an additional tariff on Indian goods, but panelists said a full deal remains stalled over India’s purchases of Russian energy. With India now able to point to trade agreements with the European Union and Australia, the panel suggested New Delhi feels less urgency to conclude a U.S. deal, making incremental progress more likely than a comprehensive agreement within the next year.

Looking beyond North America and South Asia, the panel flagged ongoing tension in the Strait of Hormuz as a factor likely to keep pressure on energy prices and complicate market-access negotiations, and noted that the U.S.-China relationship remains a key variable, particularly around whether previously announced commitments on agricultural purchases and investment are implemented.

What It Means for Business

For companies navigating affordability messaging, the panel noted that some publicly traded companies have already disclosed anticipated price increases tied to tariffs, drawing public scrutiny, while others are absorbing costs through layoffs or margin compression. Diversifying supply chains was described as a multiyear undertaking rather than a quick fix, and panelists emphasized the importance of proactively shaping how companies communicate cost pressures to shareholders, employees, government stakeholders and customers alike.

The panel’s closing advice for business leaders: build relationships across the political spectrum now, since the period immediately following the midterms is expected to bring a burst of executive action on trade and other policy priorities, regardless of the election outcome. With attention already turning toward 2028, panelists encouraged companies to invest in relationships at both the federal and state level.

APCO’s next midterms briefing will take place September 30 at 11 a.m. and will focus on how organizations can evaluate political, policy and reputational risk ahead of the election, and how to prepare messaging for the pre- and post-election period.

Registration is available at apcoworldwide.com/26midterms.