Why the midterms matter... and don’t | Hindustan Times
All eyes are on US President Donald Trump as he enters the midterm polls with an aggregated approval rating of 36% in October, and only eight out of the 50 states giving him a net positive rating. The numbers suggest that Trump’s unpopularity may drive away Republican voters even in the staunchly red states such as Kentucky and South Carolina. Whether this is enough for Democrats to seize Congress (Senate, House, or both) electorally remains to be seen. Should that happen, the second half of the Trump presidency can look very different.
History shows that any assertion of Democratic strength makes Trump double down on his policies; he’s already promised to become “Mr Veto”. (AFP)In terms of the economy — the top issue for both Democratic and Republican voters — Democrats’ pressure can change the way American AI and other big tech companies confront regulatory guardrails and innovation. To be sure, the US economy grew 3.4% in the last quarter, largely driven by investments in AI. Potential Democratic interventions on AI regulation, as signalled by several senators including Elizabeth Warren, are likely to create a global ripple effect, including an impact on equity markets.
In terms of geopolitics, if Congress flips, strained ties with Europe might receive some salve, even if there is no significant policy movement on the Iran situation. Democrats do not really have a plan yet. Increased fuel prices, primarily due to the war with Iran, have angered voters, putting cost of living at the forefront of domestic concerns. This is unlikely to be addressed in the short term, irrespective of the midterm results. There isn’t a lack of hawkishness on Iran even in the Democratic camp. At best, votes on war powers, oversight committees, and impeachment of members can be moved, but Trump is prepared to use his veto to annul any legislative steps. And this will characterise the rest of his presidency. History shows that any assertion of Democratic strength makes Trump double down on his policies; he’s already promised to become “Mr Veto”.
India is in the middle of trade negotiations with the US. A delay in negotiations can be expected if Democrats, emboldened by a strong midterm performance, insist on revisiting the terms. This may not necessarily be bad for New Delhi as it would give a buffer for getting more favourable terms. India has enough to stay interested in the results.
