Midterm Losses Put Limits on Trump's War and Trade Power

Two sources familiar with Gulf government thinking said U.S. voters’ weariness of the Iran war—and the painfully higher fuel prices many blame on it—has strengthened the view that President Donald Trump has more reason to seek a peace deal and less reason to launch another full-scale assault. The election doesn’t settle the war. It changes the calculations of those holding power over it.

The conflict has choked Gulf supplies of crude oil and liquefied natural gas, pushing up crude costs and fuel-pump prices around the world. On Wednesday, energy markets bet the election result could give U.S.-Iran peace talks more momentum. Oil fell for a third day, though tight stock levels limited the selloff, analysts said.

“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. But she warned that reading the vote as weakness could invite “a new military escalation.” That’s the narrow opening: a change in political leverage, with ordinary people still paying for a war they didn’t decide.

Fuel bills enter the war calculus

A Democrat-controlled House and Senate could intensify congressional scrutiny of Israel’s military operations in Iran, Gaza and Lebanon. The shift could also threaten long-standing U.S. support for Israel through military aid and weapons sales. Rivals seeking to unseat Prime Minister Benjamin Netanyahu seized on the Democrats’ wins to criticize him for losing bipartisan American support during his watch, as they seek to form a coalition after an inconclusive Israeli election the previous week.

The ballot result gives Democrats room to propose new aid to Ukraine, where Trump has largely halted direct U.S. financial and military aid despite broad support among Democratic and Republican lawmakers. A package could survive a Trump veto if Democrats win enough Republican backing for a two-thirds majority. But any increase in aid isn’t likely to come quickly, and it wouldn’t address Ukraine’s most pressing need: a shortage of U.S.-made Patriot air-defense interceptors to protect its energy infrastructure and cities this winter.

Trump 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. 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 return Russian diesel to the global market. Legislative resistance has limits: efforts to curb Trump’s tariff authority would likely face a presidential veto.

Congress can challenge; the apparatus remains

The midterms are unlikely to change the Trump administration’s position in trilateral peace talks with Russia. The administration has pressured Ukraine to make concessions to reach a deal while discussing business deals with Moscow that would favor U.S. investors. The Kremlin said it hoped the results wouldn’t affect what it called Trump’s “peacemaking efforts.”

The election could also give some Asian countries more reason to slow-walk investment pledges made to stave off tariffs, analysts said, while giving China a perceived advantage in ongoing trade talks. Broad U.S.-China economic relations are likely to remain in a state of “fragile stability,” said Chim Lee, industrial policy analyst at the Economist Intelligence Unit in Beijing.

Trump’s losses could ease India’s negotiations for a U.S. trade deal, which have faced delays as New Delhi seeks to protect its farmers. Anup Wadhawan, a former trade secretary to India’s federal government, said Trump’s capacity to impose “arbitrary tariffs” would face a challenge because some trade actions require Congress’s approval. Yet Congress’s power to regulate commerce and set import duties hasn’t stopped Trump from using laws that allow tariffs on national-security or unfair-trade grounds.

Exit polling showed many U.S. voters were concerned about the aggressive expansion of AI data centers, weighing on shares of major Asian chipmakers. Asian chip and AI stocks TSMC, Samsung Electronics, SK Hynix and Kioxia all fell on Wednesday; shares of U.S. data-center operators Applied Digital, TeraWulf, Core Scientific and Iren also fell in pre-market trading. Saxo Bank analyst Ole Hansen said the market increasingly appeared to be betting Trump wanted to put the Middle East war behind him. Jake Dollarhide, chief executive of Longbow Asset Management in Oklahoma, said a Democratic sweep could bring regulatory pressure on technology and potentially slow AI growth. The vote may shift the pressure inside Congress. People face higher bills. They face war and political bargaining’s costs, yet still don’t control the decisions.