The 2026 United States midterm elections delivered a significant shift in American politics, with Democrats winning control of both chambers of Congress. Voters expressed dissatisfaction with rising living costs, the conflict in the Middle East and the Trump administration’s economic and foreign policies.
For Canadian businesses, the results could create new opportunities to advance trade relationships and challenge protectionist measures. However, the election results may not indicate a return to predictable, tariff-free trade – President Donald Trump will remain in office until January 2029 and Canada must prepare for a more complicated political environment in Washington.
What are the U.S. midterm elections?
Midterm elections occur halfway through a president’s four-year term and determine the composition of Congress, alongside several state and local governments.
On November 3rd, Americans voted for all 435 members of the House of Representatives, 35 of the Senate’s 100 seats, and numerous governors and state officials.
Congress plays a central role in passing legislation, approving federal spending and overseeing the executive branch. The Senate also confirms senior administration appointments and federal judges.
What were the results?
Democrats secured control of both the House of Representatives and Senate, reversing Republican majorities and establishing a divided government for the final two years of President Trump’s term.
Democrats flipped at least seven Republican-held Senate seats, including victories in Texas, Maine, Kansas, Iowa, Ohio, North Carolina and South Carolina. They also gained more than two dozen House seats and several governorships. In fact, for the first time in 16 years, the Democrats hold the majority of governorships. The results extended beyond traditional battlegrounds, with Democrats making gains in states and districts that had supported Trump in the 2024 presidential election.
While some races remain subject to final counting and certification, the overall change in congressional control is established.
Why it matters: Democratic majorities will have greater authority to scrutinize the administration, influence federal spending, block legislation and oversee government departments. However, the president retains substantial executive powers, including authorities affecting international trade.
What issues dominated the election?
Affordability and the economy
Economic affordability emerged as a central concern for American voters. Rising grocery prices, gasoline and diesel costs and broader inflation contributed to dissatisfaction with the administration’s economic management. Post-election polling indicated that nearly nine in ten voters considered the cost of living an important factor in their decisions.
These pressures also shaped the debate around tariffs. While the administration has defended tariffs as a means of protecting American industries and encouraging domestic production, trade restrictions can increase costs for manufacturers, retailers and consumers that depend on imported goods.
For Canadian businesses, the election underscores an important reality: disruptions to North American trade impose costs on both sides of the border.
Conflict in the Middle East and energy prices
The ongoing conflict involving Iran also influenced the election, particularly through its effects on global energy markets and gasoline prices. Disruptions to international energy supplies contributed to higher fuel costs, adding to affordability pressures facing American households and businesses.
Following the election, President Trump acknowledged that the Iran conflict and its effect on gasoline prices may have contributed to Republican losses.
For Alberta, geopolitical instability presents competing economic pressures. Higher oil prices can support energy revenues and investment, but they also increase transportation costs, disrupt supply chains and contribute to economic uncertainty. The conflict reinforces the strategic importance of Canadian energy resources and the need for reliable infrastructure connecting Canadian producers to domestic and international markets.
Trade tensions and the Canadian connection
The U.S. trade war with Canada remained an important economic issue, particularly in states with deeply integrated cross-border industries. States such as Michigan, Maine and Ohio have significant economic relationships with Canada through automotive manufacturing, energy, agriculture, tourism and other sectors.
For businesses and workers in these jurisdictions, tariffs can increase production costs, disrupt supply chains and weaken competitiveness. The election results may create opportunities for Canadian governments and industry associations to engage newly elected legislators on the economic benefits of North American trade.
However, protectionism is not confined to one political party. Both Democrats and Republicans have supported policies intended to protect American manufacturing, strengthen domestic supply chains and reduce dependence on foreign suppliers.
A change in congressional control does not necessarily mean a change in American trade priorities.
What’s next for the White House?
The election creates a more challenging legislative environment for President Trump, although the administration retains significant authority over trade and foreign policy.
Three developments will be important to monitor.
Greater congressional scrutiny of tariffs
Democratic control of Congress could increase oversight of the administration’s trade measures, including their effects on inflation, employment and American competitiveness.
Congressional committees may examine the economic consequences of tariffs and consider measures limiting the president’s authority to impose new restrictions.
However, changing existing trade laws would require legislation that could face a presidential veto. Substantial bipartisan support would be necessary to overcome that obstacle.
Consequently, greater scrutiny may influence the administration’s negotiating position without producing immediate tariff relief.
Cooperation or confrontation?
The White House could respond to divided government in different ways.
President Trump has indicated a willingness to work with Democrats following the election. This could create opportunities for negotiated agreements on economic issues where interests overlap, including measures intended to address affordability.
Alternatively, legislative gridlock could encourage the administration to rely more heavily on executive authority to advance its priorities.
The administration could also pursue a combination of both approaches, seeking cooperation on domestic economic measures while maintaining a more confrontational position on trade.
For Canada, this means preparing for continued uncertainty rather than assuming a single policy direction.
The future of CUSMA
The Canada-United States-Mexico Agreement (CUSMA) remains central to Canada’s economic relationship with the United States.
Following the agreement’s 2026 joint review, ongoing negotiations and future reviews will shape market access, rules of origin and the treatment of Canadian exports.
A Democratic Congress could create additional opportunities for engagement with legislators representing trade-dependent states and industries.
However, the White House will continue to exercise considerable influence over negotiations, while concerns about domestic manufacturing, economic security and supply chain resilience remain bipartisan.
Preserving predictable, rules-based North American trade must therefore remain a priority for Canada.
What does this mean for Alberta businesses?
Alberta’s economy is closely connected to the United States through energy exports, agricultural trade, manufacturing supply chains and investment.
Energy: Alberta’s oil and natural gas sectors rely heavily on American markets and infrastructure. Expansions in linear infrastructure across the North American continent could increase Canadian energy exports while changes in U.S. trade policy could influence investment decisions. Despite this, geopolitical instability continues to reinforce the importance of energy security and export diversification.
Agriculture: Producers and food processors remain exposed to tariffs, changing market access conditions and supply chain disruptions. Greater congressional scrutiny could create opportunities for improved trade conditions, although agricultural protectionism remains a concern.
Manufacturing: Integrated North American supply chains mean tariffs can increase costs each time materials and components cross the border. Reducing trade barriers would support competitiveness, but continued domestic-content requirements could create challenges.
Small businesses: Smaller firms often have less capacity to absorb higher input costs, diversify suppliers or navigate changing trade requirements. Continued uncertainty could constrain investment and growth.
The broader lesson is that Alberta cannot depend on political changes in Washington to resolve its economic challenges. Strengthening domestic competitiveness and expanding access to international markets remain essential.
Looking ahead
The 2026 midterm elections represent a significant change in American politics, but the implications for Canada remain uncertain.
Democratic control of Congress could create opportunities for greater scrutiny of tariffs and more constructive engagement on trade. At the same time, the White House retains significant authority, and support for protectionist economic policies extends across party lines.
For Canadian and Albertan businesses, the priority remains unchanged: protect access to the United States export market while strengthening Canada’s ability to compete independently.
The Calgary Chamber will continue advocating for a competitive, resilient and prosperous business community, supported by reliable infrastructure, diversified trade relationships and a predictable policy environment.
ABOUT THE CALGARY CHAMBER OF COMMERCE
The Calgary Chamber exists to empower our business community to advance a prosperous Calgary and Canada. As the convenor and catalyst for a vibrant, inclusive and prosperous business community, the Chamber works to build strength and resilience among its members and position Calgary as a magnet for talent, diversification and opportunity. As an independent, non-profit, non-partisan organization founded in 1891, we build on our history to serve and advocate for businesses of all sizes, in all sectors across the city
