War, tariffs and China: What the US midterms mean for the Asia-Pacific

The Asia-Pacific region is grappling with the fallout from the war between the United States and Israel and Iran, which began in January. The conflict has severely disrupted energy flows through the Strait of Hormuz, leaving many countries in the area facing fuel shortages.

Analysts say the outcome of the US midterm elections on Tuesday will be closely scrutinised for any indication of a shift in President Donald Trump's approach to the war, trade and tariffs.

Many in the region are hoping for "enormous changes" during the remainder of Trump's term, but few expect them to materialise, even as the Democratic Party is poised to take control of the House of Representatives and potentially the Senate.

Energy crisis in Southeast Asia

Outside the Middle East, no region has been hit harder by the war on Iran than the Asia-Pacific. Before the conflict began, the area took in most of the Gulf oil and gas that passed through the Strait of Hormuz.

When Iran closed the chokepoint in response to the US and Israel's strikes, much of the region was left facing shortages. The Philippines, which relies on the Gulf for more than 90 percent of its crude oil imports, has been under a national energy emergency since March.

Soaring fuel costs have drained the foreign exchange reserves of the region's poorest economies, including Cambodia, Laos, Myanmar and East Timor, according to the Institute of Southeast Asian Studies (ISEAS)-Yusof Ishak Institute in Singapore.

Indonesia, Malaysia, Thailand and Vietnam have also spent heavily on fuel subsidies to shield consumers from the price hikes.

Limited congressional power

Public opinion in the Asia-Pacific region remains firmly opposed to the war, but Steven Okun said a Democratic-controlled US Congress was unlikely to force Trump to end the eight-month conflict.

"With Iran, I don't see [a Democrat-controlled Congress] having much change at all, other than the fact that the war will be investigated and there will be oversight hearings," Okun told Al Jazeera.

He suggested the Congress might even see an impeachment of the secretary of defence, but noted that such an action would not change the overall impact of the war.

Under the US Constitution, Congress holds the power to formally declare war, but Trump has claimed the attacks on Iran were in self-defence and has so far ignored congressional resolutions directing him to withdraw US forces from hostilities.

If a Democrat-controlled Congress passes legislation restricting military operations or cutting funding for them, Trump can veto it. Overriding a veto requires a two-thirds majority in both chambers, which Democrats are almost certain to fall short of.

Trade and tariff policy

On trade and tariffs, analysts see little room for Congress to rein in Trump. The US president rattled global markets last year when he imposed "reciprocal" tariffs of 10 percent to 50 percent on some 90 countries, with the aim of shrinking the US trade deficit.

Asia was again hit harder than most. Cambodia faced a 49 percent tariff and Laos 48 percent. Vietnam was slapped with 46 percent and Myanmar 45 percent.

After the Supreme Court struck down those tariffs in February, the Trump administration turned to other tools. In July, it imposed tariffs of 10 percent and 12.5 percent on goods from 60 trading partners, accusing them of failing to stop imports made with forced labour.

The list includes China, Japan, South Korea and seven Southeast Asian nations – Cambodia, Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam.

Security and US-China ties

Stephen Olson, a visiting fellow at the ISEAS-Yusof Ishak Institute, argued in a recent essay that a "strong rebuke of ‘Trumpism’" at the polls could embolden a pro-free-trade wing of the Republican Party that has been "intimidated into standing down during the Trump presidency".

That, Olson wrote, offers "a glimmer of hope" for Southeast Asian countries that depend on the US market. A Democratic-controlled Congress, he said, could also push for carve-outs and exceptions that would give the region's exporters "a modicum of relief".

Joshua Kurlantzick, a senior fellow for Southeast Asia and South Asia at the Council on Foreign Relations, said the region's wish list goes beyond trade to security.

I think nearly all of Asia would like to see enormous changes, across many domains, during the rest Trump’s term, he told Al Jazeera. "But I think much of the region believes this will not happen."

Besides "more stability" in trade and tariff policy, Asia-Pacific countries "would like to feel more stable in security guarantees from the US," he said. They would also like a "more clear, obvious US presence" in the South China Sea, where China's claims overlap with those of five Southeast Asian nations, and in the Taiwan Strait, which separates China from Taiwan, the self-governed island Beijing claims as its territory.

Businesses will also be watching whether a major Republican loss leads to "greater GOP willingness in Congress to stand up to Trump, along with Democrats, on issues important to companies in Asia," Kurlantzick said, including tariffs, trade policy, arms sales and "overall economic unpredictability".

One area where analysts do expect some change is US policy on Chinese technology. The next Congress will pass tougher restrictions on China, said Okun at APAC Advisors.

These include the Remote Access Security Act, which would extend export controls to remote access of US goods, software or technology, and the Chip Security Act, which would require companies to verify that advanced artificial intelligence (AI) chips remain in authorised locations.

The person who is least restrictive now on China is the US president, Okun added, referring to Trump's courting of China's President Xi Jinping.

The two men have met twice this year as ties have warmed after a bitter and costly trade war last year. To preserve the fragile trade truce, Trump has also held off approving a $14bn package of arms sales to Taiwan, which would be the largest ever for Taipei.

Some analysts worry that a lame-duck Trump, hemmed in at home by a Democratic Congress, could turn more forcefully to foreign policy.