Moody's: Democratic Congress Sweep Won't Move Tariffs, But Permitting Reform Could Advance

Global tariffs will stay largely intact over the next twelve months despite Democrats sweeping the House and Senate in the U.S. midterms, according to Moody's, because import duties sit with executive branches worldwide and no significant chief executives have changed recently.

The analysis frames a split political picture for supply chains: Congress flips, but the tariff file barely moves. That matters for shippers still absorbing costs from two years of tariff swings.

"Global supply chains have been suffering from tariffs that have brought higher costs, deterioration in supplier-customer relationships, and disrupted long-term planning," said Andrei Quinn-Barabanov, senior director and industry practice lead at Moody's. "While lower tariffs would be welcomed by many companies, the private sector is more focused on an easier-to-achieve objective of maintaining the tariff status quo."

Quinn-Barabanov added that "stability in import taxes would provide a needed reprieve from two years of tariff fluctuations and would also lay groundwork for serious intergovernmental negotiations that traditionally take many months to yield trade agreements." His verdict: expect no meaningful change in the tariff picture after the elections.

What could actually move in Washington?

Permitting reform. The National Association of Manufacturers (NAM) said the Democratic sweep would sharpen Washington's focus on economic pressures, specifically voter frustration with persistently high living costs. NAM flagged permitting reform as a fix with existing bipartisan backing.

"For manufacturers and lawmakers on both sides of the aisle, permitting reform offers a bipartisan path to meet soaring demand for energy, unlock new energy supplies, and bring down costs for families and businesses all while supercharging manufacturing in America," NAM said in a release.

Wood Mackenzie reached a similar conclusion. The energy research firm said permitting reform could top the congressional agenda for advancing power growth and cutting U.S. energy costs.

The context is expensive. The midterms landed amid energy costs driven by the conflict in Iran, which pushed peak U.S. diesel and jet fuel prices roughly 2.5 times above pre-war forecasts. Prices should ease as the conflict subsides, but Wood Mackenzie expects the hardest-hit products to remain 30% above pre-war forecasts in 2027.

Three levers, unequal odds

Wood Mackenzie laid out three policy options for Congress on energy affordability:

• Permitting reform. Bipartisan interest makes it the likeliest route to faster gas, transmission and wind approvals. Nuclear, carbon capture and upstream projects get an incremental boost.
• Renewable energy subsidies. Democrats have proposed several expansions, but a presidential veto makes new credits unlikely.
• Large-load cost rules. Federal mandates face legal and political resistance, so states will set cost allocation policy for data centers.

"While we see the likelihood for permitting reform, how policy is legislated and implemented remains a risk to the US economy," said David Brown, director of global integrated energy research at Wood Mackenzie. "Entrenched partisanship could fuel policy stagnation and regulatory confusion."

Industry groups line up for January

As congressional leadership posts prepare to change with the new Democratic majority, supply chain business groups signaled willingness to work with incoming leaders seated in January.

The American Chemistry Council (ACC) congratulated the newly elected members and said it would work with lawmakers on both sides of the aisle. "As we head into a new year addressing priorities that matter most to the voters who elected this new class, ensuring our industry can continue to innovate, invest, and manufacture here in home must remain a priority," the group said, pledging to "advance practical, science-based policy solutions that strengthen U.S. competitiveness, support American jobs, and ensure the United States remains the best place in the world to manufacture chemicals and plastics."

For shippers and carriers, the near-term takeaway is a stable tariff regime, diesel and jet fuel still well above pre-war baselines through at least 2027, and the real legislative action concentrated on energy permitting rather than trade barriers.