Skip to content
Back to Guavy Wire
Forex

Midterm Elections: Will Democrats' Win End US-Canada Trade War?

Instruments
CAD
Share

US President Donald Trump has been imposing tariffs on Canadian goods for two years, causing anxiety among allies and leaving Canada isolated from the lucrative US market. With the midterm elections just weeks away, Ottawa is watching closely to see if a shift in power might rein in Trump's aggressive attitude towards Canada.

The minority Democratic Party hopes to win back control of Congress, which would allow them to pass legislation that could eliminate many of the White House's tariffs. However, this could lead to government deadlock, leaving trade and economy in limbo for the next two years.

Lawmakers have united against Trump's economic policies, but it remains to be seen how Democratic leadership plans to use their constitutional authority to negate the White House on trade. Even with a unified House and Senate armed with veto-proof legislation, the Trump administration has shown a willingness to flout laws and ignore court rulings.

Canada's economy is already suffering from the collateral damage of the trade war, and an epic battle between the two sides could leave Canadian steel and aluminum producers, as well as potash producers, among others, caught in the crossfire. The only weapon available to lawmakers may be their power of the purse, but it's unclear if Democratic leaders are prepared to take a more Machiavellian approach by starving the executive branch of appropriations.

More on Forex

Disclaimer: Guavy is a data and market intelligence provider, not an investment adviser. The information, signals, and market analysis provided by the Guavy API and related services are for informational purposes only and are not intended as financial advice, investment recommendations, or an endorsement of any particular trading strategy. Trading in volatile markets, including cryptocurrency, carries significant risk and may not be suitable for all investors. Past performance is not indicative of future results. Users should consult with a qualified financial professional before making any investment decisions. Guavy makes no guarantee of trading profits or financial returns.

Market sentiment intelligence for apps, funds & agents

Location

729 55 Ave SW
Calgary AB T2V 0G4
Canada

© 2026 Guavy Inc