Trump's midterm losses could give China, India and US allies room to push back on tariffs and trade deals

The drubbing for Donald Trump's Republicans in US midterm elections could embolden some trade partners to push back against his combative policies, although they may need to tread lightly ​to avoid provoking him in his final two years in power.

Donald Trump's midterm election losses raise questions over US trade deals and tariff policies with China, India and key allies. (REUTERS/Umit Bektas) (REUTERS)Democrats captured majorities in both the Senate and House on Tuesday, as US voters delivered a stinging rebuke ‌for Trump's policies, including his tariffs, blamed alongside the Iran war for persistent inflation.

That could hand economic rival China a perceived upper hand in ongoing talks, prompt allies in Asia to slow-walk hundreds of billions of dollars in investment commitments, and give Europe more predictability over trade issues that remain unresolved.

But some partners still see choppy waters ahead, with Trump showing little sign of accepting voters' verdict on his tariff policies that have upended global trade. "US protectionism won't simply disappear," ​said Bernd Lange, chair of the trade committee in the European Parliament.

"A weakened Trump could become even more aggressive and unpredictable. A lame duck could quickly turn into an angry ​duck." Rajiv Bhatia, a former Indian diplomat and distinguished fellow at Gateway House think tank, said: "A Democratic victory will not necessarily make Trump more accommodating towards ⁠any country." Among countries that may be quietly hoping for an easier ride are America's closest Asian allies.

Japan has promised $550 billion and South Korea $350 billion in US investments in deals ​intended to placate Trump. Heo Yoon, economics professor at Sogang University in Seoul, said countries might now feel less pressure to fulfill such commitments: "Democrats seem to perceive that the investment commitments were forced on allies." But ​Kazuhiro Maeshima, a professor of US politics at Sophia University in Tokyo, said the allies will not easily be able to back out.

“The tariff issue is not over. If Japan’s response is slow, calls for additional tariffs could resurface," he said. South Korea has become a notable lightning rod for Trump's anger at countries he believes have not lived up to investment pledges.

Most recently, Seoul pushed back on Trump's assertions that it had agreed to fund Alaska LNG, a major ​pipeline. Ban Kil-joo, international relations professor at Korea National Diplomatic Academy, said scrutiny from Congress over such projects could give Seoul more time to review them.

South Korea's Foreign Ministry said it would continue ​to discuss economic and trade issues with the US administration, Congress and states, regardless of changes in the composition of Congress. In Europe, transatlantic trade tensions have largely been eased by ‌a series ⁠of deals that have so far limited the impact of Trump's US tariff onslaught.

But there are still potential quarrels, including whether Trump will retaliate against European countries that impose a digital services tax on US tech giants, and against a €3 billion loan of public money to European aircraft maker Airbus.

For India, still negotiating trade deals with the United States, the midterm results could provide an incentive to adopt a wait-and-see approach. India's trade minister earlier this month said the first phase of an India-US trade deal was in the final stages of drafting, but reiterated that New Delhi would proceed only if it secures an ​advantage over competing exporters.

The biggest ​US rival is China, which struck a ⁠trade truce with Trump that expires in January. Beijing may look for ways to use Trump's political fragility to strengthen its hand, but also may find it harder to win him over with Congress looking over his shoulder.