Asia bets on US midterm shifts

The Philippines relies on the Gulf for more than 90 percent of its crude oil imports, a dependency that has left the nation in a state of national energy emergency since March. This figure underscores the severity of the supply disruption facing the Asia-Pacific region following the United States and Israel’s war on Iran. The conflict, which began in January, triggered a closure of the Strait of Hormuz, cutting off the primary route for Gulf energy to the region. As a result, economies across Southeast Asia have faced acute shortages and soaring fuel costs.

The financial strain has depleted the foreign exchange reserves of Cambodia, Laos, Myanmar, and East Timor, according to the ISEAS-Yusof Ishak Institute in Singapore. Neighboring Indonesia, Malaysia, Thailand, and Vietnam have also spent heavily on fuel subsidies to protect consumers from price spikes. While public opinion in the region remains opposed to the conflict, analysts suggest that political shifts in Washington offer limited immediate relief. Steven Okun, chief executive of APAC Advisors in Singapore, noted that while Democrats are poised to take the House and potentially the Senate, this change is unlikely to force President Donald Trump to end the eight-month war.

Okun explained that a Democrat-controlled Congress will likely conduct oversight hearings and investigations into the conflict, but the operational reality of the war will remain unchanged. The US Constitution grants Congress the power to declare war, yet Trump has cited self-defense to justify his actions and has ignored previous congressional resolutions for withdrawal. Even if the new Congress passes legislation to restrict military operations or cut funding, Trump retains the ability to veto such measures. Overriding that veto requires a two-thirds majority in both chambers, a threshold Democrats are expected to fall short of. Okun summarized the outlook by stating that tariffs and the war will not change due to the midterms.

Trade policy faces similar constraints. The administration imposed reciprocal tariffs ranging from 10 to 50 percent on nearly 90 countries last year, with Cambodia facing a 49 percent rate and Laos 48 percent. After the Supreme Court struck down those specific tariffs in February, the administration introduced new duties of 10 and 12.5 percent on goods from 60 trading partners in July. These new levies target imports allegedly made with forced labor, affecting China, Japan, South Korea, and seven Southeast Asian nations. Stephen Olson, a visiting fellow at the ISEAS-Yusof Ishak Institute, argued that a strong electoral rebuke of Trump could embolden pro-free-trade Republicans. He suggested that a Democratic Congress might secure carve-outs for exporters, providing a modest level of relief, though deeper policy shifts remain unlikely until the 2028 presidential election.

One area of expected legislative movement involves US policy on Chinese technology. Okun predicted that the new Congress will pass tougher restrictions on China regardless of party control. Proposed legislation includes the Remote Access Security Act, the Chip Security Act, and the MATCH Act, which would align allied controls on chipmaking equipment with US standards. Both parties agree on the need for these measures, and Okun noted that the current president is currently the least restrictive on China, having met with Chinese President Xi Jinping twice this year. To preserve the trade truce, Trump has delayed approving a $14 billion package of arms sales to Taiwan, the largest in history for the island. Joshua Kurlantzick of the Council on Foreign Relations observed that while Asian nations desire stability in security guarantees and a clearer US presence in the South China Sea, many believe these changes will not materialize during the remainder of Trump’s term.

James Guild, an assistant professor at the Indonesian International Islamic University, warned that a lame-duck Trump facing a Democratic Congress might pivot more forcefully to foreign policy. He cautioned that the region should not be surprised by continued erratic behavior, noting that Democrats have historically struggled to hold the president accountable using conventional oversight tools. The outcome of the election will determine whether the new congressional majority can effectively check executive power or if the status quo will persist across trade, security, and energy sectors.