From Iran to trade: How the US midterms impact the rest of the world
AI generated
LONDON –
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AI → impact → world
The US Democrats’ “blue wave” of midterm election victories is already causing ripples across the rest of the world, where trade partners, strategic allies and enemies all see implications in the result.
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partners → cause → result
It is not immediately clear how US President Donald Trump’s loss of control over Congress will shape the course of the United States’ eight-month-old conflict with Iran.
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loss → shape → Iran
Voters have shown they are weary of the conflict, which many blame for painfully higher fuel prices.
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many → show → prices
Some Gulf governments now believe Trump has more reason than ever to seek a peace deal, and that another full-scale assault on Iran is less likely after the midterms, two sources familiar with Gulf government thinking told Reuters.
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sources → believe → Reuters
But Trump’s electoral drubbing may also embolden Iran.
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drubbing → embolden → Iran
“If Tehran recognises that Trump needs a deal, but not just any deal, a genuine opportunity could emerge to end the war,” said Ebtesam al-Ketbi of the Emirates Policy Center.
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Ketbi → recognise → Center
However, reading the vote as weakness could instead invite “a new military escalation”, she added.
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she → read → escalation
For Israel, a Democrat-controlled House and Senate may intensify congressional scrutiny of Israel’s military operations in Iran as well as in Gaza and Lebanon, while threatening longstanding US support for Israel through military aid and weapons sales.
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House → control → aid
Rivals seeking to unseat Prime Minister Benjamin Netanyahu seized on the Democrats’ wins to lambaste him for a loss of bipartisan American support under his watch, as they seek to forge a coalition following an inconclusive Israeli election last week.
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they → seek → election
The Iran war has choked supplies of crude oil and liquefied natural gas from the Gulf, driving up the cost of crude oil and prices at fuel pumps around the world.
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war → choke → world
The energy market wagered on Nov 4 that the elections could breathe more life into US-Iran peace talks.
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elections → wager → talks
Oil dropped for a third day, but tight stock levels prevented a larger selloff, analysts said.
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analysts → drop → selloff
“The market increasingly appears to be betting that President Trump wants to put the Middle East war behind him,” said Saxo Bank analyst Ole Hansen.
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Hansen → appear → him
Trump has largely halted direct US financial and military aid to Ukraine as it fights a Russian invasion, despite broad support from Democratic and Republican lawmakers.
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it → halt → lawmakers
He has angered members of Congress, including many Republicans, by lifting sanctions on Russian diesel and waiving sanctions on Russian energy only weeks after signing them into law.
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He → anger → law
Control of both chambers of Congress will allow Democrats to propose new aid to Ukraine.
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Democrats → allow → Ukraine
If they get enough backing from Republicans and secure a two-thirds majority, a new aid package would survive a Trump veto.
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package → get → veto
However, any boost to US aid is unlikely to come quickly, and it will not address Ukraine’s most pressing need – a deficit of US-made Patriot air defence interceptors to protect its energy infrastructure and cities this winter.
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it → come → infrastructure
Democrats could also target other Trump policies.
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Democrats → target → policies
Democratic Representative Gregory Meeks of New York, a candidate to head the House foreign affairs committee, has introduced bipartisan legislation to block Trump’s plan to bring Russian diesel back into the global market.
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Meeks → head → market
But the midterms are unlikely to change the Trump administration’s position in trilateral peace talks with Russia, where it has pressured Ukraine to make concessions to reach a deal while it simultaneously discusses business deals with Moscow that would favour US investors.
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that → change → investors
The Kremlin said it hopes the midterm results will not impact what it calls Trump’s “peacemaking efforts”.
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it → say → what
The elections could give some countries in Asia more reason to slow-walk investment pledges they made to stave off tariffs, and hand economic rival China a perceived upper hand in ongoing trade talks, analysts said.
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analysts → give → talks
However, broad US-China economic relations will likely maintain a state of “fragile stability”, said Chim Lee, industrial policy analyst at the Economist Intelligence Unit in Beijing.
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Lee → maintain → Beijing
Trump’s midterm losses could spell relief for India’s negotiations for a trade deal with the US, which has faced delays as New Delhi strives to protect its farmers.
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Delhi → spell → farmers
“After the US midterm losses, President Donald Trump’s capacity to impose arbitrary tariffs will certainly face a challenge.
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capacity → impose → challenge
At some point he needs the Congress’ approval for trade actions and, to that extent, he’s weakened,” said Anup Wadhawan, a former trade secretary to India’s federal government.
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Wadhawan → need → government
Congress has the right to regulate commerce and set import duties, but Trump has taken advantage of laws to impose tariffs on grounds of national security or unfair trade practices.
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Trump → have → security
Democratic Party efforts to limit that power would be likely to face a presidential veto.
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efforts → limit → veto
Another question is whether Trump will follow through on more immediate threats, such as a 100% tariff on European countries that impose a digital services tax on American tech giants, or whether a €3 billion (S$4.3 billion) loan to Airbus from the European Investment Bank will undermine what has been largely a transatlantic trade truce since 2025.
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what → follow → 2025
AI and tech
Exit polling revealed that many US voters were concerned about the aggressive buildout of AI data centres.
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voters → reveal → centres
That sent shivers through the shares of major Asian chip manufacturers.
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That → send → manufacturers
“A Democratic sweep of Congress would put pressure on tech and potentially bring regulatory pressure on everything AI and possibly slow down the wild, wild west growth figures that we see daily and often take for granted,” said Jake Dollarhide, chief executive of Longbow Asset Management in Oklahoma.
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Dollarhide → put → Oklahoma
Asian chip and AI stocks such as TSMC, Samsung Electronics, SK Hynix and Kioxia all fell on Nov 4.
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stocks → fall → Nov
Asian investors’ concerns were also reflected in pre-market trade in US markets where shares in US data centre operators fell, including Applied Digital, TeraWulf, Core Scientific and Iren.
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shares → reflect → Digital
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