Kuala Lumpur, Malaysia – Governments and businesses in the Asia-Pacific region are closely monitoring the outcomes of the U.S. midterm elections as they grapple with the ongoing economic implications of the energy crisis linked to the conflict in Iran. With significant energy dependence on Gulf oil and gas, many nations in the region are looking for potential shifts in U.S. foreign and trade policies during President Donald Trump’s remaining term.
Analysts suggest that while there is anticipation for “enormous changes,” the likelihood of a significant policy overhaul remains low, even if the Democrats gain control of the House of Representatives and possibly the Senate. “Of course, everybody is watching,” said Steven Okun, a trade specialist and CEO of APAC Advisors in Singapore. “It’s great political theatre.”
The Asia-Pacific region has felt the acute impact of the war on Iran more than any other area outside the Middle East. The conflict, which escalated in January, has severely disrupted the flow of energy through the Strait of Hormuz, leading to shortages and rising prices for essential fuels. The Philippines, which depends on the Gulf for over 90 percent of its oil imports, has been under a national energy emergency since March, and several other nations, including Cambodia and Laos, are reportedly facing significant economic strain due to soaring fuel costs.
While public sentiment in the region strongly opposes the conflict, Okun noted that a Democrat-controlled Congress is unlikely to trigger an end to the hostilities. “I don’t see [a Democrat-controlled Congress] having much change at all,” he stated, adding that oversight hearings into the war is more plausible than immediate policy shifts.
Under the U.S. Constitution, Congress has the authority to declare war, yet Trump has maintained that military actions against Iran are justified as self-defense. Congressional efforts to restrict military actions or funding could face presidential vetoes, requiring a two-thirds majority in both chambers to override, which is unlikely for Democrats.
Implications for Trade and Tariffs
Regarding trade and tariffs, industry experts are also skeptical about any major changes. Trump previously imposed high tariffs on imports from around 90 countries, and while the Supreme Court invalidated some of those tariffs, the administration has since adopted alternative measures targeting forced labor imports from countries including China and several Southeast Asian nations.
“It’s not going to affect trade policy; tariffs don’t change,” Okun emphasized. However, some analysts see a slight opening for a more pro-free-trade stance within the Republican Party, especially in light of potential pushbacks against Trump’s policies. A Democrat-led Congress could conceivably advocate for trade exceptions that might provide some relief to Southeast Asian exporters.
Beyond economic concerns, the Asia-Pacific region desires enhanced security guarantees from the U.S., particularly in contested areas such as the South China Sea and the Taiwan Strait, where tensions with China persist.
In terms of U.S.-China relations, experts expect ongoing tightening of restrictions on Chinese technology, irrespective of the election outcome. Proposed legislation aimed at extending export controls on technology exports is anticipated to pass either way, with both parties supporting a firmer approach against Beijing.
Looking ahead, some analysts worry that a weakened Trump administration, facing congressional opposition, could lead to more unpredictable foreign policy actions. “We should not be surprised by continued erratic foreign policy,” said James Guild, an academic at the Indonesian International Islamic University. As the elections draw near, the implications for the Asia-Pacific region remain uncertain.
