# Wall Street Prepares for Post-Midterm Tariff Hikes and Iran Conflict Risks Market analysts anticipate increased trade protectionism and fiscal instability following the upcoming midterm election results. - **Source:** [Fortune](https://fortune.com) - **Published:** 2026-11-03 - **Topic:** [Business](https://brifing.si/c/business) - **Original article:** - **On Brifing:** https://brifing.si/s/6e43f870-0ea7-4e10-bf29-c7893d66905f ## Midterm Election Market Expectations Analysts anticipate Democrats gaining congressional power in this week's midterm elections. Despite potential shifts in legislative control, Wall Street expects President Trump to maintain or intensify current policies. Harvard polling suggests a 96% probability of Democrats taking the House, creating a complex political environment for upcoming trade and fiscal policy decisions. ## Tariff Policy and Revenue Strategy Goldman Sachs projects that President Trump will likely announce new tariff increases following the election. These measures aim to offset potential reductions in trade barriers with specific nations like Canada. Economists estimate a rise in the effective US tariff rate of nearly 2 percentage points, positioning import duties as a primary revenue source. ## Fiscal Gridlock and National Debt With national debt reaching $40 trillion, budget hawks are pushing to reduce deficits from 6% to 3% of GDP. ING analysts suggest that a divided government will likely lead to fiscal gridlock. This stalemate shifts focus toward trade policy as a mechanism to extract additional revenue from existing import relationships and international agreements. ## Evolution of Trade Protectionism Trade policy has evolved significantly since the Supreme Court struck down initial emergency tariffs. Temporary 10% blanket rates have transitioned into a more permanent structure under Section 301. Although the issue recently faded from the public agenda, analysts expect it to regain prominence as a tool for managing federal budget pressures. ## Middle East Conflict Uncertainties The White House's post-midterm strategy regarding the Gulf war remains a critical question for global markets. UBS analysts suggest the president may adopt a more aggressive stance once freed from electoral popularity concerns. Public approval for the administration's handling of the Iran conflict remains low, with only 14% of voters strongly approving. ## Economic Costs of Military Action The financial burden of the Iran conflict has reached $47 billion, with operations extending well beyond initial projections. These costs exacerbate long-term divisions regarding government spending priorities. As the conflict stretches into months, the economic consequences continue to influence domestic policy debates and investor sentiment regarding the stability of US national security. ## Legislative Challenges and Funding Deutsche Bank notes that Republicans may attempt to pass a reconciliation bill to increase defense spending and address debt limits. These legislative maneuvers must occur before the late summer or fall of next year. The current fiscal environment remains fragile, requiring strategic navigation of competing party interests to maintain essential government operations. ## Impending Government Shutdown Risk Federal government funding is currently set to expire on December 11, following the 72-day window established by the Continuing Appropriations and Extensions Act. Preventing a government shutdown will require bipartisan support for a new continuing resolution. Markets are closely monitoring these developments as they signal broader political stability and fiscal health. ## Sources covering this story - https://fortune.com/2026/11/03/wall-street-tariffs-iran-government-shutdown-questions/ — --- _Summary written by Brifing from the original reporting. Copyright in the original article belongs to its publisher; read the full piece at the link above._