Many companies in Europe, Canada, Japan and beyond are hoping the November 3 midterm elections will restore some normality to their relationship with the United States. That reading is mistaken. I have spent a large part of my career working with American multinationals and US government agencies. What I take from that experience is that protectionism, the pivot to Asia and the rethinking of alliances are long-term trends that predate the current presidency. For any company with US markets or suppliers, the question is no longer when the storm will pass, but how to organize for the long haul.
The midterms will not change the game
Polls point to Democratic gains, but a full shift in Congress is far from certain. Republicans are defending a 53–47 Senate majority, and forecasts have moved noticeably toward the Democrats since September. Other analysts, such as Sabato’s Crystal Ball, still give Republicans the edge in the Senate race.
Even assume a fully Democratic Congress. Its foreign policy levers are real but limited: hearings, subpoenas, budget oversight and war powers votes. Americas Quarterly expects such a Congress to force more votes and scrutiny without changing presidential decisions.
The decisive constraint is the presidential veto. Any law curbing trade policy would need a two-thirds majority in both chambers to override it, as National Bank Financial points out. No realistic electoral outcome gives Democrats that margin. Most tariffs also rest on executive powers. The courts have struck down some of them, but other legal bases remain available, as this BNN Bloomberg analysis explains from a Canadian perspective.
Financial markets have taken note. Jefferies expects the average effective US tariff rate to stay between 10% and 20% even under divided government, a warning aimed at exporters in India and elsewhere. For Europe, Defence24 advises against expecting the midterms to shift American strategic thinking. The opposite may even happen: a president constrained at home often seeks to regain the initiative abroad, where his hands are freer.
2028 will not be a turning point
A familiar argument holds that companies only need to wait for the next presidential election. Recent history calls for caution. The relative loss of interest in Europe did not begin in 2017. As early as 2011, the Obama administration laid out its pivot to the Asia-Pacific, presented as the world’s new strategic and economic center of gravity. Pressure on allies to share more of the defense burden has been a constant across successive administrations.
Protectionism is not the preserve of one party either. Joe Biden did not roll back the tariffs imposed on China during Trump’s first term. He raised them further in 2024, notably on electric vehicles. His national security advisor, Jake Sullivan, set out in 2023 an explicit American industrial strategy, breaking with the free-trade consensus of previous decades. Many manufacturers in Europe, Japan and South Korea experienced the subsidy laws of that period as green protectionism.
A change of administration in 2028 would alter the method, not the direction. A Democratic president would probably treat allies as assets again rather than cost centers. Predictability would improve, and trade measures would target rivals rather than partners. But rivalry with China, the Indo-Pacific priority, industrial policy and pressure on allied defense budgets would remain. The Polish Institute of International Affairs (PISM) made the same point after earlier elections: a hostile Congress does not fundamentally change a president’s foreign policy.
Above all, part of the damage is irreversible. US partners now know that a reversal is possible every four years. This structural instability requires hedging, whoever wins. It is also the diagnosis behind the Draghi report on European competitiveness: Europe can no longer rely on many of the factors that supported its past growth. The same logic applies to Ottawa, Tokyo, Seoul or Mexico City.
Diversify: six strategic options
Organizing for divergence, rather than betting on a return to convergence, means working on several levers at once.
1. Bring geopolitics to the boardroom. Strategic plans must hold up across contrasting scenarios: targeted tariffs, across-the-board tariffs, secondary sanctions, loss of access to a technology. This requires connecting functions that still too often work in silos: procurement, customs compliance, risk management and public affairs, in Washington as well as in your home capital. Our board of directors compass tracks these divergences across the US, UK, EU and China.
2. Build one management core with modular compliance. Running two separate systems, one for the US and one for everywhere else, is costly and breeds inconsistency. A better approach is a single internal core, aligned with the most demanding standard for truly material risks, with reporting and communication adapted to each jurisdiction. Vocabulary can adapt; facts cannot. Contradictory messages across markets become evidence against you once someone puts them side by side. Investing in this ESG governance remains a no-regret move in every scenario. We map the convergence and fault lines between trading blocs in a dedicated analysis.
3. Shift supply chains from efficiency to resilience. Exposure to tariffs or sanctions is measured line by line, by country of origin and tariff code, not just supplier by supplier. Country sourcing risk mapping therefore has to go beyond tier 1. Dual sourcing and regionalization are expensive: reserve them for critical, non-substitutable inputs and reason in total cost rather than purchase price. Contracts should include clauses on sharing customs risk and on changes in law.
4. Secure agricultural commodities upstream. For cocoa, coffee, natural rubber or coconut, geographic diversification has its limits, since production is concentrated in a few tropical regions. Supply security depends on direct, lasting relationships with producers, programs that build resilience to climate shocks, and traceability that serves both regulatory compliance and continuity of supply. Certification alone protects the buyer without securing supply, as we explain in the certification illusion. Farm inputs such as fertilizers and plant proteins also deserve scrutiny, as dependencies there are structural for many importing economies.
5. Regain control over data and technology. Reliance on US cloud, software and artificial intelligence providers exposes companies to US extraterritorial law and export controls. Three reflexes apply: classify data by sensitivity and host the most critical outside the reach of extraterritorial legislation; require contractual reversibility and genuinely test exit plans; and expect US providers to apply different terms by jurisdiction as rules in the US, EU and Asia diverge.
6. Treat critical materials as a sovereignty issue. Here the most acute dependency for most economies is not on the US but on China, particularly in refining. The EU’s Critical Raw Materials Act sets a direction, and other governments are pursuing similar strategies, but the decisive levers remain in companies’ hands: long-term offtake contracts, strategic stocks, ecodesign and recycling. Circularity thus becomes a tool of sovereignty. More broadly, any input can become strategic, hence the need for a shared value reset in strategic supply chains, an issue business leaders at the B7 in Paris made a board-level priority.
None of this is a compliance exercise. It shapes competitiveness for the next decade. Companies that act now, without waiting for the verdict of November or 2028, will gain a lasting advantage over those still hoping for a return to the world as it was.
CEO and Co-Founder of Ksapa. Member of sustainability boards at major industrial groups and impact investment committees. Drawing on 25 years of experience working with multinationals, mid-size and small businesses across value chains, governments, and international organizations, Farid Baddache focuses on integrating human rights, climate, and ESG governance as drivers of business resilience and competitiveness. Author of several books on sustainability and responsible business. Connect on Bluesky @faridbaddache.bsky.social
