Currently, control of Congress remains in the balance. While the Dems aren't necessarily out of it yet, the Republicans definitely have the lead late into the fourth quarter.
If Republicans do win the House, the implications for e-commerce sellers could be profound. The key terms here are going to be China and the American Innovation and Choice Online Act.
So without further ado, if the Republicans win the House, here are three ways that it could impact e-commerce sellers.
This article isn't meant as me preemptively picking an early midterms winner or favoring one party (the truth is that I'm Canadian anyways and vote for the Rhinoceros Party of Canada each election). However, the mere mention of any American political group inevitably brings hate or love from either side, so please direct your death threats to email@example.com.
Amazon Could Stop Rolling Out a Lot of Great New Tools like Search Analytics and Product Opportunity Explorer
A couple of years ago, Amazon was grilled by Congress about whether it accesses third-party seller data for the benefit of its own private-label brands. It more or less dodged the question but admitted to using it in aggregate. The Congressional inquiries ultimately led to the proposed American Innovation and Choice Online Act which seeks to bar major online platforms, e.g., Amazon, from giving advantages to its products over competitors, i.e., Amazon private-label brands vs third-party seller brands.
Coincidentally, Amazon recently has been on quite the tear by releasing incredible tools that give sellers access to much of that aggregated data that it has been accessing for years for the betterment of its own brands. Specifically, these tools are Search Analytics and Product Opportunity Explorer, which give (limited) access to real search data and sales data.
Currently, the American Innovation and Choice Online Act has not been passed on to Senate for voting. The Biden Administration has advocated the bills and has said, “We are very committed to moving ambitious legislation in this area.”
If the American Innovation and Choice Online Act is never passed, will Amazon be so motivated to release new tools that give sellers a more level playing field against it? It's difficult to say, but a real threat of it passing definitely doesn't hurt the chances of sellers seeing new tools like Search Analytics and Product Opportunity explorer in the future.
Amazon's Private-Label Brands Are Here to Stay
There have been some rumblings over the last couple of years that Amazon may voluntarily or involuntarily either stop selling its private-label brands such as Amazon Basics or break it off into a completely separate company as it faces scrutiny from lawmakers into its alleged e-commerce monopoly. The Wall Street Journal reported that earlier this year, Amazon executives openly discussed the idea of stopping its private-label business entirely to ease anti-trust scrutiny.
Much of this scrutiny for Amazon again relates to the aforementioned American Innovation and Choice Online Act. A Republican-led congress wouldn't entirely eliminate the threat of this bill from ever passing or scrutiny towards Big Tech in general, but it definitely would reduce the threat somewhat. Some Republicans, notably Rand Paul, have been very open in being against such legislation (including a Fox News op-ed earlier this year) and especially the idea of breaking up any Big Tech company such as Amazon.
Long story short, a Republican-controlled Congress decreases the chances of the American Innovation and Choice Online Act ever passing. Moreover, while getting tough on Big Tech is relatively a bipartisan topic, taking drastic action such as forcibly breaking up a Big Tech company like Amazon would be even more unfathomable.
Biden Could Scrap Some of the Trump Section 301 Tariffs
This one might seem to be contrary to what you would otherwise believe. A Republican President, Donald Trump, was the one who put the Section 301 tariffs on China in the first place. Why would a Republican-controlled House increase the chances of these very tariffs getting removed?
Trump's tariffs have proven to not be a red-and-blue issue. There are supporters and naysayers on both sides of the aisles with some Republicans actually pushing to have the Trump-enacted tariffs rolled back.
The issue is that being tough on China is about as bipartisan policy as there is right now in American politics. Joe Biden looked to be set to repeal some of the tariffs earlier in the summer, but his cabinet was extremely divided on the matter. Moreover, there seemed to be some hesitancy to give any impression of being soft on China so close to the midterm elections.
With the elections now in the rearview mirror, one of the major issues the Biden administration will face is tackling inflation, and one way to at least potentially help that issue would be to lower tariffs. Coincidentally, in China, they just wrapped up their 20th National Congress in October where Xi Jinping in was “re-elected” for a third term. Not that dissimilar to America, there was some inkling that Xi Jinping would be hesitant to give the optics of being soft on America and negotiate on trade.
While a Republican-led house doesn't necessarily significantly help or hurt the chances of Biden repealing the tariffs, having no elections on the table for another two years definitely increases the chances of some type of action taking place.