Democrats took both chambers on Tuesday after a campaign in which tariffs featured as a cost of living issue. The veto math still favors the White House, but subpoena power, oversight and the refund docket change what importers should expect in 2027.
WASHINGTON, NOV. 5, 2026
Two days after an election in which the cost of living dominated and tariffs became, for the first time in decades, a voting issue, the practical question in Washington’s trade bar is narrow and unsentimental: what can a Democratic Congress actually do about a tariff program it campaigned against?
The answer, on the evidence of the statutes now in force and of the arithmetic of a presidential veto, is less than the campaign rhetoric implied and more than nothing.
Democrats will control both the House of Representatives and the Senate when the new Congress convenes in January, with some individual races still uncalled as of Thursday. They will not hold the two thirds majorities in both chambers that overriding a veto requires, and no serious analyst expects those majorities to materialize on a trade vote.
That constraint defines everything that follows.
THE AUTHORITIES CONGRESS WOULD HAVE TO REACH
The tariffs in force today do not rest on a single statute that a single bill could repeal.
After the Supreme Court held on Feb. 20 in the consolidated Learning Resources v. Trump and Trump v. V.O.S. Selections that the International Emergency Economic Powers Act does not authorize tariffs, the administration rebuilt the program on four separate foundations.
Section 122 of the Trade Act of 1974 supplied a temporary 10 percent global tariff from Feb. 24. It carried a statutory 150 day life and expired on July 24. It is no longer part of the picture, though its brief existence produced its own litigation, including a Court of International Trade ruling in May that the tariffs were not justified and a Federal Circuit stay the following month.
Section 232 of the Trade Expansion Act of 1962 now carries the largest share of the program. Steel, aluminum and copper are dutied at 50 percent, with lower rates for derivatives and for certain trading partners. Autos and heavy trucks are at 25 percent, buses at 10 percent. Furniture is at 25 percent and lumber at 10 percent. Patented pharmaceuticals carry a 100 percent rate, with 15 or 10 percent for certain partners and lower rates negotiated for some companies. Polysilicon is at 15 percent. Certain unmanned aircraft systems carry 100 percent, with 25 percent on smaller drones lacking thermal imaging and some lines deferred to February 2027.
Section 301 of the Trade Act of 1974 carries the China program, the forced labor tariffs at 10 or 12.5 percent effective July 24, a 25 percent rate on certain Brazilian imports, and the maritime and shipbuilding measures. New investigations opened in March produced tariffs of 10 to 12.5 percent covering goods from 60 countries.
Section 338 of the Tariff Act of 1930, never previously used in the statute’s ninety six year history, supports the 50 percent duty on a list of Canadian goods, modified most recently by proclamation in October.
Section 201 safeguard duties on quartz surface products run at 25 percent in the first year, declining to 19 percent by the fourth, through August 2029.
None of these statutes requires annual congressional approval. Each delegates authority to the executive on terms Congress itself wrote, in some cases decades ago. Reclaiming that authority means amending the delegations, and amending them over a veto.
WHAT DEMOCRATS SAY THEY WILL DO
The legislative vehicles already exist and have bipartisan sponsorship, which is the strongest argument that something could move.
The Trade Review Act of 2025, introduced by Senators Maria Cantwell of Washington and Chuck Grassley of Iowa, would require the president to notify Congress within 48 hours of imposing a tariff and would sunset any new tariff after 60 days unless Congress approved it by joint resolution. Its significance is less the specific mechanism than the fact of a senior Republican cosponsor.
Senator Ron Wyden of Oregon has introduced a broader measure, S. 5081, which would require congressional approval for new presidential tariffs and for trade agreements, and would establish a bipartisan Joint Committee on Tariffs and Trade as a standing institutional check.
Narrower proposals target specific actions: rescinding the Section 338 increases on Canadian goods, and terminating the Section 301 forced labor tariffs. The House passed a measure disapproving the Canada tariffs in February, which demonstrated that a bipartisan majority exists for at least that vote, and also demonstrated that a majority is not enough.
A separate avenue runs through sanctions legislation. The recently enacted Lindsey O. Graham Sanctioning Russia and Iran Act of 2026 contains a presidential waiver under its Section 115, and Democrats may attempt to strip that waiver authority, a maneuver that would test whether trade adjacent restrictions can be attached to must pass vehicles.
WHAT ANALYSTS EXPECT
The expert consensus is that oversight, not legislation, is where the new majority will make itself felt.
Pierre Yared, a former member of the White House Council of Economic Advisers now at the Council on Foreign Relations, notes that tariffs are set by the president under authorities Congress has already delegated, and that a change in congressional control is unlikely by itself to change tariff policy. Repealing or narrowing those authorities over a veto would require two thirds of both chambers, a threshold he does not see emerging. He expects tariff policy to remain largely under presidential control, with its direction shaped instead by litigation and by negotiations with trading partners.
Rebecca Patterson, also at the Council on Foreign Relations, expects Democrats to press Republicans to join them in reducing selected tariffs under the banner of affordability, and to open hearings on whether companies that received tariff refunds passed the savings to customers or retained them as profit.
Joshua Kurlantzick, who follows Asian trade relationships, argues that the new Congress can use oversight and investigative powers to bring more transparency to the tariff program, while considering an actual rollback unlikely given the veto, notwithstanding the hopes of several Asian governments.
Lawyers at Baker McKenzie advising corporate clients have reached a similar conclusion, writing that courts are likely to remain the primary legal check over the next six to twelve months and that companies should prepare to engage new committee leadership in January.
Trade enforcement and China specific measures are the exception. Those command bipartisan support and are unlikely to be disturbed by the change in control. An importer hoping that a Democratic Congress will soften Section 301 action against China is reading the politics wrong.
THE POLITICS UNDERNEATH
What made tariffs electorally salient this year was price, not principle.
A Cato Institute survey conducted with Morning Consult before the election found that 75 percent of respondents said tariffs would matter to their vote, with 35 percent saying they would matter a lot. Seventy four percent said tariffs had raised prices in stores and 53 percent said they had weakened the economy. Only 21 percent agreed with the proposition that foreigners primarily pay the cost.
That last figure is the one trade economists have fixed on. The incidence argument, which was politically effective in 2018 and 2019, has not survived contact with four years of grocery and durable goods prices.
Researchers at the Federal Reserve Bank of New York have attributed 2.9 percentage points of goods price inflation to the tariff program. The Tax Foundation estimates the average household cost at about $820 in 2026, down from roughly $1,000 in 2025, with the average effective tariff rate at 7.2 percent for the year against 7.7 percent in 2025.
A Wall Street Journal survey found 58 percent of blue collar workers opposed the tariffs and favored Democrats by 12 points, a reversal of the coalition alignment that made the original program politically viable.
Nicholas Sargen, an economist writing in The Hill before the election, argued that the program has not delivered on its central promise. The trade deficit grew after Chinese exports were rerouted through third countries, and widened again in 2026 as the artificial intelligence build out pulled in computing equipment imports. He wrote that it is difficult to see how current policy reduces the external deficit while that investment cycle continues, since the external balance ultimately reflects the fiscal position rather than the tariff schedule.
THE REFUND DOCKET AS OVERSIGHT TERRAIN
The most immediate congressional lever may be the IEEPA refund program, which is simultaneously a Treasury obligation, an administrative bottleneck and a political story.
The invalidated IEEPA tariffs collected roughly $166 billion from more than 330,000 importers. Judge Richard K. Eaton of the Court of International Trade ruled in March that importers are entitled to refunds with interest. Customs and Border Protection launched an automated system, known as CAPE, on April 20. By late October the agency reported 315,069 declarations submitted, 222,754 validated and about 44 million entries covered, representing roughly $137.9 billion in potential and certified refunds. Some $81 billion had been refunded by July.
The program is not finished and is contested. Importers have asked the Court of International Trade to order Customs to build a fourth phase covering IEEPA duties on entries subject to antidumping and countervailing duty orders, arguing that the agency can already isolate those duties and that delay is causing harm. In October the court certified a class of all importers that paid IEEPA tariffs between Feb. 1, 2025 and Feb. 19, 2026, a certification the government is expected to appeal.
Practitioners continue to advise importers with large volumes of finally liquidated entries to file individual suits rather than rely on the class, on the view that individual actions remain the faster route to payment.
Congressional interest here is obvious. Hearings on refund administration, on whether refunded importers passed savings through, and on the Treasury’s handling of the obligation require no new legislation and no presidential signature.
WHAT IT MEANS FOR BUSINESS
For importers and exporters, the correct planning assumption is continuity in rates and intensification in scrutiny.
Rates are unlikely to fall by legislative action in 2027. The Section 232, 301, 338 and 201 programs will remain in force unless a court or the president removes them. Companies budgeting for 2027 should model current rates, not hoped for relief.
Litigation remains the live variable. The Court of International Trade heard argument on the forced labor Section 301 tariffs on Sept. 30, and the Section 338 action against Canada is under challenge. Trade counsel generally regard Sections 301 and 232 as the most durable of the current authorities because they rest on completed administrative records rather than emergency findings.
Disclosure and documentation burdens will rise. A Congress conducting hearings on tariff pass through will generate information requests, and companies that received substantial refunds should expect to explain what they did with them, to committees if not to customers.
Negotiated relief becomes more attractive to the executive. An administration facing an affordability argument has an incentive to produce visible wins in bilateral negotiations. The Section 232 determinations on wind turbines and on robotics and industrial machinery, where tariffs were declined in favor of negotiated import volumes with a 180 day reporting clock, point in that direction. So does the Trade Representative’s indication that recommendations in the Section 301 overcapacity investigation will come before the end of this year rather than at the March 2027 statutory deadline, alongside his remark that he doubts current tariffs are as high as they will go.
Those two signals are not contradictory. They describe an administration willing to trade specific tariff restraint for specific commitments while keeping the overall level of protection intact.
THE INSTITUTIONAL QUESTION
Beneath the two year political cycle sits a longer argument about who sets American trade policy.
Justice Neil Gorsuch, concurring in the February decision, criticized Congress for having allowed the president to set tariffs in the first place and emphasized nondelegation principles. That critique cuts across party lines and is the intellectual foundation for the Cantwell and Grassley approach, which does not repeal any tariff but restores a congressional vote as a condition of one.
Whether a Congress that spent ninety years delegating this authority will reclaim it in a single session, over a veto, in a divided government, is the question the next fourteen months will answer. The historical record offers little encouragement. The electoral record, for the first time in a long while, offers some.
THE JANUARY CALENDAR
The new Congress convenes in January, and committee leadership will change at the Senate Finance Committee and the House Ways and Means Committee, the two panels with jurisdiction over tariff legislation, together with the Senate Banking and House Foreign Affairs committees that carry sanctions and export control jurisdiction.
The practical consequence for companies is that the relationships built over the past two years with majority staff become minority relationships, and that the incoming majority staff will be assembling an oversight agenda during the transition. Trade counsel are advising clients with significant tariff exposure to seek meetings in December rather than waiting for hearings to be noticed.
The legislative calendar itself is unforgiving. Appropriations, the annual defense authorization and any expiring tax provisions will consume floor time in the first quarter. A standalone trade bill competing for that time, with a veto waiting at the end, is a difficult case for leadership to make. The more realistic path for any trade provision is attachment to a vehicle that must pass, which is why the sanctions waiver question is being watched closely as a test case.
A SECTOR BY SECTOR READ
The effect of divided government varies considerably by sector, and generalizations about relief are unhelpful.
Retail and consumer goods importers have the strongest political tailwind, because their products are where the affordability argument is most visible. They also have the weakest legal position, since consumer goods are covered principally by Section 301 and Section 232 actions with completed administrative records.
Automotive faces the 25 percent Section 232 duty on vehicles and parts alongside input cost pressure from the 50 percent metals duties and from rare earth licensing. The sector has the best developed case that stacked tariffs are self defeating, and it is the sector most likely to benefit from negotiated partner specific rates.
Agriculture is exposed to retaliation rather than to American tariffs, and its interest is in de-escalation generally rather than in any particular repeal. The Department of Agriculture’s October announcement of a $472.5 million purchase of domestic agricultural products is an indication of how the administration has been managing that exposure.
Construction and housing carry the lumber and furniture duties, at 10 and 25 percent, into a market already constrained by financing costs. The affordability argument applies with particular force here and has bipartisan resonance.
Technology hardware sits across the China program, the polysilicon and drone actions and the export control regime simultaneously, and is the sector where congressional sentiment is least favorable to relief. Bipartisan support for restricting technology trade with China is the most stable feature of the landscape.
THE EXPORTER VIEW
American exporters have been the quiet constituency throughout, and a Congress focused on consumer prices may not represent them well.
Retaliatory measures in force or recently suspended cover agricultural commodities, certain manufactured goods and, in the maritime context, reciprocal port fees on vessels linked to the United States. Exporters of services, including engineering, logistics software and financial services, face no tariffs but are exposed to regulatory friction that does not appear in trade statistics.
The negotiating dynamic matters more to exporters than the legislative one. Where the administration converts tariff threats into managed outcomes, as it did last month by declining Section 232 duties on wind turbines and on robotics and industrial machinery in favor of negotiated import volumes, exporters generally gain predictability. Where tariffs are left to run, exporters absorb retaliation they did not cause.
Congressional oversight can help here in a specific way. Hearings that document export losses attributable to retaliation create a record that strengthens the hand of negotiators seeking offsetting commitments, which is a slower mechanism than legislation and a more reliable one.
THREE SCENARIOS FOR 2027
The first and most likely scenario is stalemate with noise. Democrats pass messaging bills, the president vetoes or the Senate filibuster intervenes, hearings generate headlines about pass through and refunds, and the tariff schedule is substantially unchanged at the end of the year. Companies should treat this as the base case.
The second is negotiated narrowing. The administration, responding to the affordability argument on its own terms, concludes a series of bilateral arrangements that lower rates for specific partners and specific sectors without conceding the authority to impose them. The wind turbine and robotics determinations, and the 180 day negotiating clocks they set running, are consistent with this path. Under this scenario average effective rates drift down through 2027 without a single congressional vote.
The third is judicial disruption. A ruling against the forced labor Section 301 action, or against the Section 338 measures, would remove a block of the program faster than any legislative process could and would trigger a second refund exercise on top of the unfinished first one. Trade counsel assign this a lower probability than the first two but consider it the scenario with the largest single step effect.
In all three cases the compliance burden increases rather than decreases, because every one of them generates documentation, reclassification or refund work. That is the one safe prediction available.