United States: after the midterms, towards a new balance of power between Trump and Democrats on the economy

Customs duties, oil prices, deregulation of health policy or even the development of artificial intelligence (AI): if President Donald Trump will retain control, the Democrats will have a more important voice in the debates on a set of economic policies in the United States after their gain of control of Congress during the mid-term elections.

At the end of an electoral campaign marked by Americans' concerns about the high cost of living, the problem of purchasing power could become the cornerstone of the Democrats' parliamentary efforts, and concern, by cause and effect, the policy of customs duties and the energy measures decided by Donald Trump.

The coming weeks and months will reveal the priorities of Democratic leaders in Congress, and their skill in negotiating with Republicans. It is possible that the news on Capitol Hill, as of January 3, 2026, will also have repercussions on the Federal Reserve (Fed). The Democrats should advocate a reinforced fight against inflation, going against the rate cuts regularly demanded by Donald Trump.

Democratic Senator Ron Wyden, who will head the upper house's Finance Committee in January, gave an overview of the discussions to come, promising Wednesday to work to ensure that "the ultra-rich and multinationals pay a fair share" of taxes and that Congress "regains its authority over trade policy" of the United States.

Donald Trump, however, still has veto power, and Democrats are unlikely to have a sufficient majority in Congress to overturn such decisions by the Republican president. In the absence of agreement between the two parties on the budget, government operations and public spending will have to be interrupted – a period of “shutdown” often conducive to advancing negotiations.

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Machine-translated from French