For businesses, the significance of the 2026 November elections isn’t who wins, but what the results reveal about the direction of US policy during the remainder of the Trump administration and beyond.
The midterms, which will be held on 3 November 2026, will determine control of Congress, as well as thousands of state and local offices. Held halfway through a president’s four-year term, they are widely viewed as a referendum on the incumbent administration’s performance and the direction of the US.
The scale is substantial. All 435 seats in the House of Representatives and roughly one-third of the 100-member Senate will be contested, alongside 39 gubernatorial elections – including three in US territories – and thousands of races for state legislatures, attorneys general, secretaries of state and other offices.
Because the president remains in office, these elections rarely produce an abrupt shift in national strategy. Instead, they shape the administration’s ability to advance its agenda, influence federal spending, confirm senior officials and judges, and navigate congressional oversight. They also signal the political durability of the administration’s priorities heading into the final two years of the presidential term and the 2028 election cycle.
Regulatory momentum shifts to the states
The most immediate consequences for business will not come from Washington, but rather state-level elections. As legislative activity in Congress has declined – with the current Congress on track to pass fewer laws than any in modern history – states have assumed a larger role in regulating emerging policy areas such as artificial intelligence, data privacy, cybersecurity, environmental policy and labour standards.
The result is an increasingly fragmented regulatory landscape, with Democratic- and Republican-led states adopting different approaches, forcing companies operating nationally to navigate an overlapping, and at times conflicting, patchwork of local regulations, increasing compliance requirements.
Testing the 2024 coalition
The midterms are the first meaningful test of whether the coalition that returned President Donald Trump to office in 2024 holds. Republicans expanded support among independents and several demographic groups that had traditionally leaned Democratic, while Democrats continue to struggle with low favourability ratings among their own voters and questions over their broader electoral strategy. The 2026 results will answer a defining question: whether 2024 represented a lasting political realignment or was simply a temporary response to affordability concerns and dissatisfaction with the previous administration.
The midterms will also shape expectations for the 2028 presidential election and the future direction of the Republican Party after Trump. Strong Republican performance would reinforce MAGA as the party’s dominant political model and strengthen the position of candidates seeking to inherit Trump’s coalition. Conversely, widespread Republican underperformance would intensify debates over whether the party should evolve beyond Trump’s brand of politics.
Control Risks outlook
Our baseline expectation is divided government: Democrats retaking the House, while Republicans hold the Senate. This outcome would likely increase congressional oversight, investigations into the administration and fiscal brinkmanship, resulting in greater policy uncertainty around budgets and appropriations. Crucially, the executive lever would remain, with the Trump administration retaining considerable freedom to pursue its agenda through executive authorities – particularly on trade, tariffs, sanctions, immigration and foreign policy.
The alternatives do not change that underlying dynamic. A Democratic sweep would increase oversight and legislative constraints, while the less likely outcome of continued Republican control would facilitate the administration's broader agenda. In either scenario, however, the White House would retain substantial authority to shape trade, sanctions, immigration and foreign policy through executive action.
Several variables could shift the outlook over the coming months. Inflation and affordability will remain the most important determinants of electoral outcomes, while the political ramifications of the recent Iran conflict, immigration and public safety will also influence the electoral environment. Finally, the election will unfold against a backdrop of elevated political polarization and above-average protest activity, increasing the risk of localized unrest, contested election narratives and isolated political violence, even if the overall integrity of the electoral process remains intact.
How Control Risks is supporting clients
For most organizations, the challenge is not predicting who wins the election. It is understanding how different outcomes could affect operations and strategic planning.
Companies with substantial presences in the US are primarily focused on domestic operating risks, including civil unrest, political polarization, regulatory uncertainty and the growing divergence in state-level policy. International companies, meanwhile, are generally more concerned with how the midterms could influence US foreign and economic policy, including trade, tariffs, sanctions, export controls, alliances and relations with key partners and competitors.
Control Risks helps clients understand what political developments mean for their business. We translate election scenarios into business-relevant risk assessments tailored to specific sectors and geographies, while tracking and predicting evolving federal and state policies in areas such as artificial intelligence, data privacy, critical minerals, climate and industrial policy. We also help companies evaluate how an increasingly polarized political environment could create reputational and security risks.
In today’s environment, organizations do not need to take a political position to become targets for activists or more nefarious threat actors. Routine commercial decisions or marketing campaigns can quickly escalate into consumer boycotts, online harassment, targeted protests or threats against employees and facilities.
Political volatility has become a permanent feature of the operating environment. We find that the organizations that outperform are not those that predict every political event or election result, but those that embed political risk into strategic decision-making and adapt as conditions change. Control Risks helps clients identify emerging risks, understand their business implications and act before they become operational disruptions. In addition to tailored assessments, we are also able to assist with monitoring services identifying hotspots, triggers and election scenarios.