How Will The Midterm Election Affect The Branded Merch Industry?

Midterm elections historically don’t favor the party of the sitting president, and with rising prices, redistricting and political recriminations, some pundits are predicting this one may swing both houses of Congress back to Democratic hands.

To learn more about the potential outcomes – and what they might mean for the branded merchandise industry – I sat down with Chris Lamond, founding partner of Thorn Run Partners, the Association’s lobbying firm in Washington, to talk about current trends and how things might shake out in November, as well as what to watch for during the lame duck session and the new Congress come January.

Note: The following conversation has been edited for brevity and clarity.

PPAI Media: With just a few weeks to go until the November midterm election, what are your predictions for what might happen, both in terms of which party controls Congress and what that could mean for the next two years?

Chris Lamond: My prediction is that the House does flip to Democratic control and that the Senate stays in the Republican hands, maybe one less seat in the majority. Currently, the House has 219 Republicans (with one vacancy) and 215 Democrats – 218 are needed for control, so it’s just a four-seat majority. A four-seat pickup requirement is a pretty low bar, and the number of retirements is greater on the Republican side, so it’s a really tight margin in the House.

The Senate has 53 seats for Republicans and 47 for the Democrats, although that includes the two independents who caucus as Democrats. The net gain of four seats that’s required to take the majority in the Senate is probably a little bit too much of a hill to climb on that side, but they’re going to have a pickup opportunity or two for sure.

Midterm elections tend to swing against the party of the sitting president. Do you think there’s enough discontent to give Democrats control of both houses of Congress?

Historically, midterms are not great for the party in charge. I think the average is actually around 20 seats that are lost for the president’s party every midterm since World War II, with three exceptions – one was 9/11. But other than that, since World War II, something like 17 of 19 midterms have gone against the president in charge. So those are some pretty strong headwinds. However, I don’t see the Senate flipping to the control of the Democrats – there are some pickup opportunities for Republicans in Michigan and New Hampshire.

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If that’s how things pan out, what do you think that bodes for the next two years?

We’ve seen a really aggressive pattern of executive orders and rulemakings out of this administration the first two years even when they had control [of Congress], and I think if they lose the House, Republicans will do a lot more administrative action. I think you’ll see more agencies conduct rulemaking to implement some of the administration’s priorities.

But we will still have the normal movement in Congress. Congress gets painted with a pretty broad brush of not being active and kind of a do-nothing Congress, but there’s a lot that actually happened. AGOA [the African Growth and Opportunity Act] is a good example of a bipartisan piece of legislation that PPAI worked on.

ICYMI: Congress Passes 2-Year AGOA Renewal

But things that will happen on the margins just don’t get a lot of attention. They’re not the major policy initiatives. Like, we’re not going to shore up Social Security in the next two years. That’s highly unlikely. But we’ll see a lot more investigations in the administration from the Democrats that will have gavels in the House of Representatives. That could slow things as well.

You’ll see everybody, both sides, wanting to tee up policy initiatives for 2028, so there’ll be a lot of activity. And even though they may not make it into law, those proposals tend to be the foundation for future legislation. You’ll probably see that on both sides, and the Democrats will want to probably put together a tax proposal to run on in 2028. So those are all important to track, just because they do become legislation in later years.

If we’re going to see more administrative action, how does that affect your recommendation for how PPAI advocates for the industry?

I don’t think it changes too much. We’ve always tried to work with the administration through Congress, utilizing representatives and senators who back-channel messages to the White House. We’ve had success doing that and we want to continue doing that, and I think that’s the right approach with the administration.

You’ll see everybody wanting to tee up policy initiatives for 2028. And even though they may not make it into law, those proposals tend to be the foundation for future legislation, so those are all important to track.”

Chris Lamond

Founding Partner, Thorn Run Partners

There’s been considerable back-and-forth with Canada on trade, and new tariffs added on both sides. How does the turmoil with our neighbor to the north affect things, and also the ongoing conflict with Iran and the shipping problems through the Strait of Hormuz?

I wish I had the answer! It’s a challenge for sure. All I can tell you is the administration realizes that the public sentiment is against them on what’s going on in Iran, that there are real challenges to financial markets, let alone activities around just normal commerce.

They, for the most part, don’t seem to be too worried about it, although during the Republicans’ midterm convention, they kind of talked about why they don’t think it’s that big of an issue and why they think their policies are the right ones to continue to engage on. But the reality is that it does have market impacts – inflation, gas prices, all the issues that they need to solve if they’re going to win in November on the affordability crisis that is certainly out there.

Get the latest U.S. tariff updates in PPAI’s tariff tracker.

Not knowing their plans makes it difficult to advocate because we don’t always know what we’re arguing for or against.

We have had to be reactionary a bit, which isn’t the best posture to be in. But the good news is, with access comes opportunities, so we’ve got the ability to respond once we see the activity coming from the administration. It would be a worse situation if we weren’t active and weren’t involved and weren’t engaged.

I think PPAI has done a really good job over the last year and a half to engage more and make those concerns heard, and we do know that they want to hear them and they want to understand how their policies are impacting day-to-day operations and commerce.

Let’s dig into the lame duck session a little bit – that’s the time between the election and when the newly elected folks are sworn in in January – as well as those first few months of the new Congress. What do you expect to see introduced? What do they have to pass? What do you think they might pass?

They will come back on November 9th, the Monday after the election, and depending on the results, say if the Republicans keep the House and keep the Senate, then you might see them move a little bit faster on some of those things they’ve kicked to the lame duck. There’s a defense authorization package out there, the farm bill, a surface transportation bill.

There’s a number of bipartisan AI bills out there. You’ve seen a lot of doom-and-gloom reports of AI domination, and the concern there is how to regulate vis-a-vis China and other nations that are maybe doing more on AI. So the global race to AI dominance is potentially going to be moved up. I would call it a dozen or so major pieces of legislation that could be enacted during lame duck.

Again, it all depends. If I’m the Democrats and I take over in the midterms, I probably don’t want to do anything because I want to wait until I can have control of the gavels in January and then restart the farm bill, restart the surface transportation bill, write my own AI policy without having to worry about it being bipartisan. So the midterms really do have an oversized role in how January and February look.

Since you’ve predicted that the House will flip, do you see another fight in December over extending funding to keep the federal government open?

Sometimes we’ve seen the party that takes over agree with the other side and say, you know what, we’ll just fund next year as you funded it. We’re not going to fight it. Let’s start afresh in January with a new cycle.

We’ve also seen it the other way, which says, no, we’re going to stop you in your tracks. We’re not going to agree. We’re going to shut the government down until we take over and write our bills again. So I could argue it both ways.

But I will say that for the most part, the Senate appropriations process has been more bipartisan than the House. And you could see some of those top-line numbers coming into a place of more bipartisanship. But again, the politics will have to be answered before we can really know for sure.

So funding is a must-pass issue. Is there anything in the next Congress that is also a must, that we might see early in 2027?

Yes, there are a handful, but none are that consequential. There are expirations for the farm bill and some of the defense programs, but those should be taken care of during lame duck. If they’re not, and the government’s completely shut down, then yes, they would have to take them up, but I don’t foresee that. I foresee them being able to get through to some agreement and having those extensions punted forward to a future date and not letting those major programs expire.

This administration has been hard to pin down on its long-term plans, but what kind of executive actions do you expect in the next few months?

We know where the president is really focused. He’s focused on trade. He’s focused on manufacturing. The critical minerals issue is going to probably get more attention as well. Transportation will have some movement as they look to fund major projects. Some of the policy issues around election integrity will be an issue. There’ll be some things that probably aren’t as popular around immigration as well. I think those are some of the top-line issues.

The president’s meeting with Chinese President Xi Jinping [last month] suggests that progress is being made. The latest summit in Washington didn’t provide too many announcements on deals, but the administration continues to be optimistic about a longer trade relationship with China. All is in the backdrop of Taiwan and that, of course, is the most important item to solve.

ICYMI: White House Announces ‘30-for-30’ Tariff Reductions With China

Changing trade policy and tariffs are directly impacting many of our members. What should the branded merchandise industry be looking for, both good and bad, in this election and in the months to follow?

Some of it’s uncertain, but the USMCA agreement is obviously, given the continued trade fight that we’re having with Canada right now, the most ripe for being rewritten. That’s a big one. And of course, China. I think that China and Canada are the two biggest trade agreements that are under consideration and up for change.

RELATED: US Declines To Renew USMCA

What else do you think it’s important for our members to know in this space?

It’s important for the members to know that their involvement and engagement matters and that it’s making a difference, and that it’s important to stay engaged consistently to build relationships, even when we’re not asking for something. That is critical.

The work we’ve done engaging in LEAD and ECHO – all of that is really building momentum and positive relationships so that when we do need someone to stand up against the SWAG Act or some other piece of legislation that comes out of nowhere, we’re going to have folks that know who we are and know what we care about. We’ve got to be prepared and continue to educate members about the importance of the industry in case something like the SWAG Act ever should rematerialize.

Join Us To Support The Industry In Washington: Register Your Interest In Attending LEAD 2027

With our new global economic impact report, that conversation should be much more impactful, because $174 billion is a whole lot bigger than $27 billion.

I know, I love it! I think that’s so great. I think the economic report is really going to allow us to refocus the conversation on the industry and put us in a different light.

ICYMI: Inside The $174 Billion US Branded Merchandise Market

Please contact Rachel Zoch, CAS, PPAI’s public affairs manager, at rachelz@ppai.org if you have any questions about regulatory issues or government affairs.