Asia-Pacific Braces for Stalled Shifts After US Midterms

The Philippines has relied on the Gulf for more than 90 percent of its crude oil imports, a dependency that leaves the nation under a national energy emergency since March. This figure underscores the vulnerability of the Asia-Pacific region, where governments and businesses are closely watching Tuesday’s US midterm elections. The area has suffered the most significant energy shocks outside the Middle East following the US and Israel’s war on Iran, which began in January.

When Iran closed the Strait of Hormuz in response to strikes, the region faced immediate shortages. The Institute of Southeast Asian Studies reported that soaring fuel costs have drained foreign exchange reserves in Cambodia, Laos, Myanmar, and East Timor. Neighboring economies including Indonesia, Malaysia, Thailand, and Vietnam have also spent heavily on subsidies to protect their consumers from price spikes.

Steven Okun, chief executive of APAC Advisors in Singapore, described the regional attention as great political theatre. He argued that a Democratic-controlled Congress is unlikely to force President Donald Trump to end the eight-month conflict. While the war has faced firm opposition in public opinion across the Asia-Pacific, Okun stated that the only likely outcomes would be investigations and oversight hearings. He noted that even a potential impeachment of the secretary of defense would not alter the war’s overall impact.

Structural constraints limit congressional power in this area. Trump has claimed the attacks on Iran were acts of self-defense and has ignored congressional resolutions directing a withdrawal of forces. If Democrats pass legislation to restrict military operations or cut funding, Trump retains the right to veto. Overriding such a veto requires a two-thirds majority in both chambers, a threshold Democrats are almost certain to miss.

Trade policy presents a similar challenge for the incoming Congress. Trump imposed reciprocal tariffs ranging from 10 to 50 percent on 90 countries last year, with Asia bearing a heavy burden. Cambodia faced a 49 percent tariff, Laos 48 percent, Vietnam 46 percent, and Myanmar 45 percent. After the Supreme Court struck down those measures in February, the administration imposed new tariffs of 10 and 12.5 percent in July on 60 trading partners, including China, Japan, South Korea, and seven Southeast Asian nations. Okun maintained that tariffs will remain largely unchanged by the new legislative body.

Stephen Olson, a visiting fellow at the ISEAS-Yusof Ishak Institute, offered a narrower view of potential change. He suggested that a strong electoral rebuke of Trumpism could embolden pro-free-trade Republicans who have been quiet during the presidency. A Democratic Congress might push for specific carve-outs that provide some relief to regional exporters, though deeper shifts in trade policy would likely wait for the 2028 presidential election.

Security concerns also dominate the regional wish list. Joshua Kurlantzick, a senior fellow at the Council on Foreign Relations, noted that countries want more stable security guarantees and a clearer US presence in the South China Sea and the Taiwan Strait. Businesses are watching to see if a Republican loss leads to greater party unity in standing up to the president on arms sales and economic unpredictability.

One area where change is expected is technology regulation. Okun stated that the next Congress will pass tougher restrictions on China regardless of which party holds power. These include the Remote Access Security Act, the Chip Security Act, and the MATCH Act, which aim to control export access and chipmaking equipment. Trump has met with Chinese President Xi Jinping twice this year and has paused a $14 billion arms sale to Taiwan to preserve a trade truce. James Guild, an assistant professor at the Indonesian International Islamic University, warned that a constrained Trump might turn more forcefully to foreign policy, predicting continued erratic behavior in the lame-duck period.