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Partners Gain Leverage

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A Democratic victory that gives the party majorities in both the House and Senate in the midterm elections, amid voter discontent over the rising cost of living and tariffs, could give trading partners more room to resist Donald Trump’s policies or slow the implementation of their investment pledges. It could also strengthen China’s position in negotiations. Japan has pledged $550 billion in investment in the United States, and South Korea $350 billion. Political pressure on the two countries to follow through may ease, though analysts believe Trump could step up his pressure to demonstrate that his policies are working. The tariffs remain unresolved, and congressional scrutiny of the projects could give Seoul time to review its commitments, while Tokyo’s slow response could renew calls for additional tariffs.

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