Democrats Take Washington: What Happens Next to Canadian Tariffs, CUSMA & Your Business?

Toronto, ON – November 4, 2026

The American people delivered a significant political change in the November 3 midterm elections. Democrats won control of both the U.S. House of Representatives and the Senate, ending Republican control of Congress and fundamentally changing the political landscape in Washington.

President Donald Trump remains in the White House until January 2029. However, beginning in January 2027, his administration will face a Democratic-controlled Congress with greater authority to challenge legislation, investigate government decisions and scrutinize trade policies.

For Canadian businesses, the immediate questions are: Will U.S. tariffs change? Will CUSMA negotiations improve? Will Canada–U.S. relations stabilize? And what government assistance is available?

What Happened in the U.S. Elections?

All 435 seats in the House of Representatives, 35 Senate seats and 36 governorships were contested.

Democrats secured majorities in both chambers of Congress, making substantial gains in traditional Republican strongholds and competitive congressional districts.

Key Election Results

• House of Representatives: Democrats secured the majority, gaining seats in Pennsylvania, Iowa, Texas, Florida and other states.
• U.S. Senate: Democrats captured Republican-held seats, shifting control of the chamber.
• Texas: Democrat James Talarico won a Senate seat, the first Democratic statewide Senate victory in Texas in decades. Democrats also captured the governorship.
• North Carolina: Former Governor Roy Cooper won a Republican-held Senate seat.
• South Carolina: Democrat Annie Andrews won a Republican-held Senate seat in a traditionally conservative state.
• Kansas: Democrat Adam Hamilton won a Senate seat, marking the state’s first Democratic Senate victory since the 1930s.
• Ohio and Iowa: Democrats captured additional Republican-held Senate seats.
• Governors: Democrats also made significant gains in several states, while Republicans retained control in others, including Florida.

Some races were still being finalized on November 4, but control of both chambers had been established.

Why Did Voters Shift?

 Election reporting and voter surveys identified several major concerns:

• Rising living costs, inflation and household affordability.
• Economic uncertainty and the impact of tariffs on prices and businesses.
• Dissatisfaction with the administration’s handling of the economy.
• The war with Iran and its effects on energy prices.
• Concerns about government accountability and congressional oversight.

The election demonstrated that economic conditions and affordability remain central concerns for American voters.

What Changes in Washington?

The new Democratic Congress will have greater influence over federal legislation, spending decisions, government investigations and presidential appointments.

It may also increase scrutiny of the administration’s international trade policies.

However, President Trump retains substantial executive authority over tariffs, foreign affairs and trade negotiations, as well as the power to veto legislation.

The election creates a new political environment, but it does not guarantee an immediate change in U.S. trade policy.

What Does This Mean for Canada–U.S. Relations?

Canada’s relationship with the United States remains one of its most important economic partnerships. 

The new Congress could create additional opportunities for the Canadian government and Canadian businesses to engage American lawmakers on cross-border trade, investment and supply-chain issues.

CUSMA — The Canada–United States–Mexico Agreement

The 2026 CUSMA review remains a major concern for Canadian exporters and manufacturers.

A Democratic-controlled Congress may seek greater involvement in trade-policy oversight and future legislative decisions. However, both American political parties have supported measures designed to protect domestic manufacturing and employment.

Canadian businesses should therefore prepare for continued uncertainty rather than assume that the election will produce immediate concessions.

U.S. Tariffs

Existing U.S. tariffs continue to affect Canadian industries, particularly steel, aluminum, automotive manufacturing, machinery, forestry and related supply chains.

Congressional scrutiny could increase pressure for exemptions, modifications or negotiations, but the election itself does not cancel any tariffs.

Investment and Supply Chains

Companies with U.S. customers, suppliers or expansion plans should continue monitoring trade-policy developments and reviewing their exposure to changing duties and regulatory requirements.

How Has the Canadian Government Responded?

Prime Minister Mark Carney’s government has emphasized protecting Canadian industries, strengthening domestic manufacturing and diversifying Canada’s international trading relationships.

Canada has already introduced tariff-response measures, financing programs and industrial-support initiatives.

As of this November 4 advisory, no new federal business-support package specifically responding to the U.S. midterm election results has been confirmed.

The following programs and measures were announced previously and may remain relevant to eligible businesses.

Government Funding and Financial Assistance

Federal Programs

Regional Tariff Response Initiative (RTRI)

The federal government has committed approximately $3.45 billion over four years through regional development agencies to assist tariff-affected businesses and strengthen economic resilience.

Eligible projects may involve equipment, productivity improvements, market diversification, competitiveness and liquidity needs.

BDC Pivot to Grow — Tariff Support

The Business Development Bank of Canada offers financing for qualifying tariff-affected businesses, including:

• Loans ranging from $250,000 to $5 million.
• A minimum annual revenue requirement of $1 million.
• Interest relief and repayment terms designed to assist with cash-flow pressures.

Strategic Response Fund

A previously announced $2 billion federal initiative intended to support industrial adaptation, competitiveness and businesses facing trade disruptions.

Large Enterprise Tariff Loan Facility

Financing support for qualifying larger Canadian businesses experiencing tariff-related pressures.

Workforce Assistance

Federal employment and work-sharing measures may assist qualifying businesses seeking to retain workers during temporary economic disruptions.

Ontario Programs and Measures

Ontario businesses should also examine:

• The Ontario Together Trade Fund.
• The Protect Ontario Financing Program.
• Trade-impacted community and workforce initiatives.
• The October 21 Canada–Ontario industrial action plan, which includes substantial previously announced commitments to the steel sector 

Important: These are not newly announced post-election grants. Eligibility, funding availability, repayment conditions and application deadlines must be reviewed for each program.

What Should Canadian Businesses Watch For?

Over the coming weeks and months, Canadian businesses should monitor:

CUSMA negotiations: Any changes to negotiating positions, rules of origin, market access or dispute-resolution procedures.

Tariff exemptions and modifications: Changes affecting specific products, industries or cross-border shipments. 

The new U.S. Congress: Committee leadership, trade hearings and proposed legislation when the new Congress convenes in January 2027.

Canadian federal and provincial announcements: Additional tariff assistance, manufacturing incentives, workforce programs and market-diversification support.

Exchange rates and investment conditions: Changes affecting import costs, export competitiveness, borrowing and capital investment.

New international markets: Opportunities arising from Canada’s expanding trade relationships with Europe and other regions.

What Should Businesses Do Now?

We recommend five practical steps:

1. Assess your exposure: Review U.S. customers, suppliers, tariffs, customs classifications and contracts.
2. Review available funding: Identify government grants, loans, rebates and assistance relevant to your business.
3. Prepare investment projects: Consider automation, new machinery, research and development, energy efficiency and productivity improvements.
4. Diversify your markets: Explore opportunities beyond the United States, including Europe and Asia.
5. Engage early: Communicate trade-related challenges to appropriate government officials and industry representatives.

Businesses should not postpone essential planning while waiting for Washington to announce its next trade decisions. 

How GTA Strategies Can Assist

GTA Strategies helps Canadian businesses navigate government policies, identify funding opportunities and engage decision-makers at the municipal, provincial and federal levels.

Our initial consultation is free, and our preliminary research to identify potentially available government funding is also free.

Professional fees apply to subsequent services under a mutually agreed engagement.

If your business is experiencing tariff pressures, considering expansion or seeking government assistance, we would welcome the opportunity to speak with you.

 Contact us today to discuss your organization’s funding needs and how we can assist.