Republicans fear Trump’s trade war could lead to political wipeout

Republican lawmakers say there’s a good chance that President Trump's trade war will boomerang on Republicans politically in 2026, as rising prices and shrinking growth could offset other accomplishments by the GOP.

Republican senators are pointing to the 1932 and 1982 elections as historical examples of when trade wars and resulting price inflation hurt their party at the ballot box, and they are worried that history could repeat itself.

Many Republican lawmakers view tariffs as a tax hike on American consumers, and some note that the last two times Congress enacted tax hikes on the scale of Trump’s recent tariffs, the president’s party suffered a wipeout in the next election.

“In the national elections, you can go back to 1982 when I think it was about 26 congressional seats that were lost [by Republicans],” said Sen. Thom Tillis (R-N.C.), who will be a top Democratic target in next year's midterm election.

In 1982, then-President Reagan’s first midterm election, the House GOP lost 26 seats amid high interest rates and voters’ sour view of the economy. The Senate GOP lost one seat in that cycle.

That same year, the Congress passed the Tax Equity and Fiscal Responsibility Act, which increased excise and corporate taxes and improved tax compliance — increasing federal revenue by nearly 1 percent according to the nonpartisan Tax Foundation.

“No doubt, if we’re having the same discussions about tariffs in February of next year, all the indicators would be ‘wrong track,’” Tillis said.

He said the Trump administration needs to land the favorable trade deals its promised by February of next year or Republicans could pay a steep political price.

“They’ve got about 10 months to wrap a bow around this and say, 'See, I told you so,’ or you’re going to start seeing political headwinds,” Tillis said.

The other election that looms in lawmakers’ memory is the 1994 contest when Republicans picked up 54 seats in the House and eight seats in the Senate after then-President Clinton raised taxes by signing the Omnibus Budget Reconciliation Act of 1993.

The Tax Foundation estimated in a Friday report that Trump’s tariffs will increase annual government revenue as a share of gross domestic product by 0.56 percent, the biggest increase since Clinton signed the 1993 tax hike.  

Republican senators expressed relief when Trump announced he would drop the steep reciprocal tariffs he announced on most countries for a period of 90 days, but they say the political danger hasn’t passed, noting that Trump slapped a 145 percent tariff on China and China retaliated with a 125 percent tariff on U.S. imports.

While stock markets shot up after Trump announced his 90-day pause on most of the steepest tariff increases they fell back again sharply Thursday amid lingering anxiety about the direction of the U.S. economy. On Friday, markets regained some of those losses.

Lawmakers found the sell-off in the bond markets especially distressing because of its implication for the broader economy. The yields on 10-year and 30-year Treasurys soared this week, hitting as high as 4.59 percent and 4.88 percent, putting upward pressure on borrowing costs for businesses and consumers alike.

The 30-year yield — the basis for many mortgage rates — saw its biggest weekly surge since 1982, according to Yahoo Finance.

A senior Senate Republican aide who requested anonymity said that Trump risks fumbling his best issue in the 2024 election, the economy, which was voters’ top priority last year.

A Gallup poll released in October showed Trump with a 9-point lead over his opponent then-Vice President Kamala Harris on the handling of the economy.

An Economist/YouGov poll published this past week found Trump’s job approval rating dropped by 5 percentage points compared to last week amid the turmoil caused by his tariff announcements.  

The tariffs have been a particular worry in farm states.

“It’s not good for my farmers,” Sen. Mike Rounds (R-S.D.) said last week of the turmoil in the stock, commodity and bond markets.

Rounds, who is up for reelection next year, said, “We’ve got a lot of people that rely on being able to sell our commodities around the world.”

China, which is Trump’s biggest tariff target and has responded with its own tariffs on U.S. goods, imported $1.4 billion worth of goods from South Dakota in 2022, the last year for which data was available. That accounted for 28 percent of the goods produced in the Mount Rushmore State.

Some Republicans are warning that raising tariffs is just as politically dangerous as raising taxes, an anathema in today’s GOP.

“Tariffs are a tax on consumers, and I’m not a fan of jacking up taxes on American consumers,” Sen. Ted Cruz (R-Texas) declared in an interview with Fox Business’s Larry Kudlow.

Sen. Rand Paul (R-Ky.) is warning fellow Republicans that they could face landslide defeats next year if they don’t change course on trade, which he says could trigger a severe economic recession.

Paul pointed out that the authors of the 1930 Smoot-Hawley Tariff Act — Sens. Reed Smoot (R-Utah) and Willis Hawley (R-Ore.) — were both defeated in the 1932 election.

He said he believes the tariffs enacted in 1930 made the Great Depression significantly worse and hurt the Republican Party’s brand for decades afterward.

“We went into the wilderness for a long, long time,” he said. “The depression was multifactorial, but most historians have written that that Smoot-Hawley tariff actually made things worse and the depression longer.

“I don’t think the politics are good,” he said. “The economics of tariffs are bad; the politics, if anything, are worse.”

Senate Democratic Leader Chuck Schumer (N.Y.) said Trump’s tariffs are pushing the country into a recession, and he claims that’s already affecting sentiment in Senate battleground states.

“We are seeing it move the political needle across the country because people have less and less faith in Donald Trump’s handling of the economic policies of this country, plain and simple. We’re seeing it in just about every state, and the numbers continue to get worse for him,” Schumer said at a recent press conference.

Sen. Susan Collins (R-Maine), another top Democratic target in the 2026 midterm election, has also spoken out against Trump’s tariffs on allies, especially the 25 percent tariff on Canada.

She told The Hill she opposes the heavy tariff on Canadian imports because of the economic impact on her home state.

“I never thought that putting tariffs on friendly countries that are our allies is the way to go,” she said.

She remembered talking with Trump’s top trade adviser, Peter Navarro, about the negative impact of tariffs on Maine’s lobster industry during Trump’s first term.

“I remember [in] the first administration talking with Peter Navarro about the impact on the lobster industry. There are times when tariffs are appropriate. I think China is an example of that. The Canadian tariffs make no sense,” she said. “This is the position I’ve had for a very long time.”