What the US Midterms Mean for Latin America in 2026

MEXICO · ANALYSIS

The US midterms and Latin America are linked mainly through oversight, not repeal: a Democratic House could hold hearings and use the budget, yet most tariffs, sanctions and deportation powers sit with the White House. For US readers, the 3 November vote matters most for the USMCA trade review, remittance costs and funding for immigration enforcement.

Mexico shares a border and a trade pact with the United States, so Washington’s election feeds directly into its tariffs, remittances and deportations. This analysis sets out what Congress controls, what it does not and what remains unknown, building on the USA & Canada Intelligence Brief.

What Is on the Ballot and Who Holds the Power

On 3 November Americans vote for all 435 House seats, 35 Senate seats and 36 governorships. The Senate is the harder prize.

Republicans hold 53 seats to 47, so Democrats need a net gain of four, and Cook Political Report rated Alaska, Iowa, Kansas, Ohio and Texas as toss-ups, although that rating may predate the final weeks. The brief does not mention tariffs, the USMCA, Venezuela, Cuba, remittances or deportations.

The policy links drawn in this article are our own analysis.

The Actors

Several officials shape the answer to how a change in Congress would reach Latin America. Each is listed with the role the research confirms for 2026.

• Donald Trump is US president and sets tariff, sanctions and deportation policy largely through executive powers.
• The election could reshape the leadership of both the House and the Senate.
• Jamieson Greer is US Trade Representative and the lead US voice in the USMCA review.
• Markwayne Mullin, a former Oklahoma senator, is Homeland Security Secretary, replacing Kristi Noem; the Senate confirmed him on 23 March 2026 and he was sworn in on 24 March.
• Claudia Sheinbaum Pardo is Mexico’s president.
• Delcy Rodríguez is Venezuela’s acting president after the US capture of Nicolás Maduro in January 2026.
• Tim Kaine, a Democratic senator, sponsored the war powers resolution on Cuba that the Senate rejected in April.

Tariffs and the USMCA Review

How Tariffs Reached Their Present Form

On 20 February 2026 the Supreme Court ruled 6–3 that the International Emergency Economic Powers Act does not authorise tariffs. The administration then imposed a 10% global surcharge under Section 122 of the Trade Act of 1974, effective 24 February.

Section 122 caps such a measure at 150 days unless Congress extends it, and Congress did not. The surcharge expired on 24 July 2026, which shows Congress shaping tariffs by inaction.

From 24 July, new Section 301 tariffs apply to 60 economies at 10% to 12.5%, under a forced-labour enforcement case that the US Trade Representative’s office opened in March. Mexico, Canada, the EU, Ecuador, Indonesia and Pakistan received the lower 10% rate, and the measure has no fixed end date.

Goods that qualify under the USMCA are exempt. Ebrard said “there is no change there” and that only the legal basis changes, and more than 80% of Mexican exports remain exempt, while Section 232 duties of 50% on steel and aluminium and of 25% on vehicles, with an exception for US content, continue.

What a Democratic House Could and Could Not Do

A Democratic House could hold hearings, issue subpoenas and use its power over appropriations to scrutinise tariffs. It could also pass tariff-limiting bills, but those need the Senate and either a presidential signature or a veto-proof majority.

Tariffs now rest on Sections 232 and 301, which are executive-branch powers that are harder to stop than the emergency act. Our reading, not a sourced fact, is that a Democratic House alone is unlikely to remove existing tariffs.

Talks on the Section 232 duties continue.

The USMCA Review

The first joint review took place on 1 July 2026 under Article 34.7 of the agreement. The United States declined to renew it as it stands, while Canada and Mexico affirmed support for renewal.

That triggers annual reviews, with the next around July 2027, and the pact expires on 1 July 2036 if the three countries do not agree to extend. Greer visited Mexico from 22 to 24 July for bilateral talks, and Sheinbaum said progress was made.

The Congressional Research Service, in report R48787 of 29 September 2026, says the USMCA Implementation Act requires consultation with the House Ways and Means and Senate Finance committees. It adds that the trade office must brief them within 20 days of a joint review meeting and that there is “no precedent” for how Congress may approach the scope of the review.

Congress would need to approve implementing legislation for any significant change. Our inference is that a Democratic House would gain hearing and oversight leverage but would not control the negotiation.

Sanctions, Migration and Money

Venezuela

In January 2026 the United States captured Maduro. The Treasury’s sanctions office, OFAC, issued General Licence 46 for the oil trade on 29 January and General Licence 47 for diluents on 3 February, and General Licence 46A superseded the first on 10 February.

In April the US lifted sanctions on Delcy Rodríguez, and in October it delisted Jorge Rodríguez, president of the National Assembly. No presidential election date has been set.

Sanctions are mostly executive actions, so Congress influences them through oversight, hearings and bills. Our inference is that a Democratic House cannot reverse the sanctions relief.

Cuba

The United States runs an energy blockade of Cuba, largely through the Coast Guard. On 28 April 2026 the Senate rejected, 51–47, Kaine’s war powers resolution to end it, and Kaine had cited humanitarian crises on the island.

War powers resolutions can force votes, and a Democratic House could pass one. The Senate and a presidential veto would remain obstacles, and we found no reporting on Cuba policy later than April.

Remittances

A 1% US excise tax on remittances paid in cash or similar physical instruments took effect on 1 January 2026, according to BBVA Research. Transfers from bank accounts and from debit or credit cards are exempt.

Congress enacted the tax in 2025 through the One Big Beautiful Bill Act, so repeal would need both chambers and the President. Mexico said it would refund the 1% on cash transfers and promoted a bank card so migrants can avoid the tax.

Banxico, Mexico’s central bank, reported remittances of US$41.802 billion in January to August 2026, up 2.2% on the year. July alone was US$5.571 billion, up 3%, and the 12 months to August came to US$63.370 billion.

Deportations and Immigration Funding

The Washington Office on Latin America reports that the One Big Beautiful Bill Act gave about US$191 billion to the Department of Homeland Security. That includes US$75 billion for ICE and US$65 billion for Customs and Border Protection, available through 2029 and outside annual appropriations bills, so a Democratic House cannot easily cut it.

A 76-day shutdown of the department ran from 14 February to 30 April 2026. Trump then signed a bill funding most of it but leaving out ICE and CBP, and the Senate passed a reconciliation package of roughly US$70 billion for them by 52–47, though we could not confirm it became law.

Border Patrol apprehensions in the first five months of fiscal 2026 were the lowest in about 60 years. The administration claims more than 675,000 deportations and 2.2 million self-deportations since 20 January 2025, and these are its own claims.

The 2026 shutdown showed that the annual spending bill is the main Democratic lever, and a House majority would strengthen it and add subpoena and hearing power over ICE.

Scenarios and Mexico’s Economic Cushion

Three Scenarios

These are scenarios, not forecasts. In the first, Democrats win the House and Republicans keep the Senate, so Mexico would face more hearings on tariffs and ICE but the same executive tariffs and sanctions.

In the second, Democrats win both chambers and could pass war powers and tariff bills sooner, yet a veto would still stand. The tipping risk is a budget clash with the White House that repeats the 76-day shutdown pattern of 2026.

In the third, Republicans hold the House and current policy continues. Annual USMCA reviews, Section 232 talks, the remittance tax and ICE funding would all carry on unchanged.

Mexico’s Economic Cushion

INEGI, Mexico’s statistics office, estimated on 30 October that GDP grew 0.9% in the third quarter from the previous one and 3.2% on the year. Citi’s survey of 20 October expects growth of 1.4% for 2026.

Annual inflation was 3.62% in the first half of October, according to INEGI on 22 October. Banxico held its rate at 6.50% unanimously on 24 September, and in Citi’s survey 25 of 37 respondents expect no change through end-2026.

Citi’s median year-end forecast for the peso is 18.20 per dollar. We found no source linking the peso to the midterms.

What It Means for You

For US importers, goods that qualify under the USMCA stay exempt from the new Section 301 tariff, and more than 80% of Mexican exports remain exempt. Section 232 duties of 50% on steel and aluminium and of 25% on vehicles, with an exception for US content, still apply, and the result on 3 November does not change those rates on its own.

For investors and executives, annual USMCA reviews mean the pact’s future stays open until at least July 2027. A Democratic House would add congressional scrutiny of those talks without taking them over.

For households sending money to Mexico, the 1% tax applies only to cash, and bank and card transfers are exempt. For policy readers, the ICE and CBP money sits largely outside annual spending bills, so border enforcement would change slowly whoever controls the House.

What Is Not Known

The final result is unknown, and the House and Senate seat counts we found conflict. We also could not confirm whether the ICE and CBP reconciliation bill became law.

We found nothing on Cuba policy after April 2026, and it is unclear whether the new Section 301 tariffs will face court challenges. No source says how much a Democratic House would prioritise Latin America.

The date of the next annual USMCA review and any concrete list of US demands on Mexico are not public in the sources we found. Banxico’s September remittance figure and its August monthly figure were also not confirmed.

What to Watch

Several dated releases will test the arguments above. Banxico’s decision dates for November and December are unconfirmed, so check its calendar.

• 3 November 2026: US midterm elections, with all 435 House seats, 35 Senate seats and 36 governorships at stake.
• Early November 2026: Banxico’s September remittance data, with the exact date unconfirmed.
• November 2026: INEGI’s October inflation release, after 3.62% in the first half of the month.
• 23 November 2026: INEGI’s official third-quarter GDP figures, replacing the flash estimate.
• Around July 2027: the next annual USMCA joint review.

Related reading: Puerto Vallarta Travel Guide for Expats and Nomads 2026; Mexico Continent Role, Weight and Alliances in Latin America; Who Borders Mexico? US, Guatemala, Belize and USMCA Trade; more from Mexico.

Frequently Asked Questions

Could a Democratic House end Trump’s tariffs on Mexico?

Probably not on its own. Tariffs now rest on Sections 232 and 301, which are executive-branch powers, and any tariff-limiting bill needs the Senate and a presidential signature or a veto-proof majority.

What role does Congress have in the USMCA review?

The law requires consultation with the House Ways and Means and Senate Finance committees, and the trade office must brief them within 20 days of a joint review meeting. Congress would need to approve implementing legislation for significant changes.

When does the USMCA expire?

The agreement expires on 1 July 2036 if the three countries do not agree to extend it. After the United States declined to renew it on 1 July 2026, annual reviews follow, with the next around July 2027.

Can Congress change the US remittance tax?

Yes, but repeal would need both chambers and the President, because Congress enacted the 1% tax in 2025. It applies to cash transfers only, and bank and card transfers are exempt.

Would a Democratic House change Venezuela or Cuba policy?

Only at the margins. Venezuela sanctions are mostly executive actions, and a Democratic House could hold hearings and pass a Cuba war powers resolution, but the Senate and a veto remain obstacles.

Can a Democratic House cut deportation funding?

Not easily. About US$191 billion for the Department of Homeland Security, including US$75 billion for ICE, is available through 2029 outside annual spending bills, although a House majority would add subpoena and hearing power over ICE.