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Business News/ Opinion / Online-views/  Opinion | The consequences of the US midterm elections

Opinion | The consequences of the US midterm elections

The ramifications of the Democratic Party winning the House of Representatives will extend beyond US borders

Illustration: Jayachandran/MintPremium
Illustration: Jayachandran/Mint

US President Donald Trump’s vision of a “beautiful bipartisan sort of situation" following the Democratic Party regaining control of the House of Representatives is unlikely to become reality. His presidency has been a rancorous one. Democrats smarting from two years of being locked out of power entirely in the executive and legislature are unlikely to do him any favours now. This will hamstring Trump’s agenda in many instances. In others, a Democrat-controlled House may find itself aligning with Trump in surprising ways, even if the bipartisanship is not quite as benign as he envisions. In both cases, the ramifications will extend beyond US borders.

Traditionally, the party that wins the White House loses the next midterms—a balancing act that shows American voters’ unease with a consolidation of federal power. For instance, the Democrats lost more seats in the 2010 midterm elections two years after Barack Obama’s winning the presidency than the Republican Party has this time around. There is a tendency in any democratic system, besides, to overestimate current divides rather than place them in a historical perspective. With these caveats in mind, the Trump presidency has still been extraordinarily divisive within the US and paradigm-shifting outside it. In many instances, this has been down as much to the style of his rhetoric as the substance of his policy. For example, Obama had repeatedly criticized North Atlantic Treaty Organization “free riders" without putting the wind up European leaders as Trump has done.

The electoral consequences of this divisiveness are the first takeaway from the midterms. In 2016, Stanford professor Adam Bonica developed a scoring system for ideology in politics: the Database on Ideology, Money in Politics, and Elections. As per this system, the Congress that will take office early next year will be the most ideologically polarized in the last four decades. This is not to suggest that the Democratic Party has shifted hard to the left en masse. Warhorses such as Elizabeth Warren still control it. And popular candidates who hewed further to the left—such as Robert Francis O’Rourke, Andrew Gillum and Stacey Abrams—all lost.

Perhaps these results have saved the Democratic Party from the worst impulses of its base. But that may not last. The extent to which the electorate has been polarized means that candidates like O’Rourke and Gillum came closer to causing upsets than any Democrat candidate has in decades. The popularity of rising stars like them and Alexandria Ocasio-Cortez poses difficult questions. Ironically, there is a substantive overlap between the American left and Trump’s distaste for free trade. This, in turn, can pressure more moderate Democrats to position themselves accordingly. For instance, in 2016, despite being an architect of the Trans-Pacific Partnership (TPP), Hillary Clinton was compelled to disavow it given the anti-TPP stance of her popular rival for the Democratic presidential nomination, Bernie Sanders.

This leads to the second takeaway. No matter who controls the legislature, the president retains sweeping powers to shape foreign policy. But the US legislature can exert pressure via various subcommittees, its prerogative to approve trade deals and the like. While a Democrat House may do so elsewhere—say, relations with Russia or the Philippines—on two major issues that have implications for oil prices and global trade, it may actually end up signing on to Trump’s agenda. For instance, Obama had found the Iran nuclear deal a hard sell to his party. It is unlikely to be the hill Democrats choose to die on now. That means Trump’s tightening the screws on Iran—with the consequent disruption in oil prices that the Organization of the Petroleum Exporting Countries has now hinted at with its U-turn on oil output cuts—will continue.

Likewise, frustration with Chinese trade practices is not solely a Republican issue. After all, the Trump administration has built on its predecessor’s moves to block Chinese acquisitions of American companies. And a number of Democrats have called for more confrontational policies with China. If Trump’s raising the stakes on trade with China gains the backing of a Democratic House, making it a truly bipartisan policy shift, the consequences for global trade and strategic competition between the US and China could be significant.

Trump can expect precious little sympathy from the House elsewhere. Investigations into his presidential campaign’s alleged links with Russia will likely intensify. So will calls for impeachment proceedings. On this and a dozen other fronts, bitter battles are in the offing. The House is thus unlikely to pass any more stimulus like Trump’s tax cut last year—or do much of anything to push his economic agenda as the US gears up for the 2020 presidential elections. This means that as the tailwinds from the tax cut fade, so will the logic of the Fed tightening that is fuelling the dollar’s strong run. For emerging market economies, this is good news as far as dollar debt and foreign direct investment go—the third takeaway.

Given the US’ economic and strategic dominance, its domestic politics have always had a bearing on other states. However, the disruption Trump has caused has heightened this considerably. That, perhaps, is the fourth takeaway.

Will the Democratic Party gaining control of the House prove a serious barrier to Donald Trump’s agenda? Tell us at

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Updated: 09 Nov 2018, 01:09 AM IST
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