Synopsis
After the US midterm elections, stock futures show a positive reaction despite ongoing economic uncertainties. Trump’s legislative agenda faces gridlock, impacting his trade and immigration policies significantly. The focus will shift to regulating AI, potentially stalling infrastructure growth in the US economy. India’s position in trade negotiations may improve due to Trump’s need for success overseas.
The global economy breathes a sigh of relief as it expects a return to normalcy after the US midterm results. The initial market reaction is of hope, with US stock futures rising, treasury yields dipping, and dragging the dollar down. Sweeping legislative changes are off the table for the remaining two years of Trump 2.0. This should slow down his unconventional economic agenda of creating trade barriers, throttling immigration and reckless energy adventurism. Trump has the budget to wage the war in Iran, but he will be constrained to escalate it. The US Supreme Court has struck down the provision he used to impose reciprocal tariffs. But there are other legal mechanisms to push them through. Democrat Asian Americans and African Americans voted to the senate and House of Representatives are expected to increase friction over the president’s immigration agenda. The gridlock in Washington will be a gradual containment, instead of any outright reversal.
Congress will turn its attention to regulating AI with knock-on effects for global capital flows. The midterm results directly challenge the no-handbrake expansion favoured by Trump and most Tech Bros. The industry faces an immediate transition from unchecked infrastructure-building to a more sedate pace that curbs its appetite for resources and is subject to antitrust scrutiny. Trump has the veto on sweeping legislative changes to AI safety and accountability standards. A standoff over AI that slows infrastructure-building could pull down growth of the US economy and trigger a fiscal showdown.
Effects of the elections on India are mixed. Trump’s external engagement could become more insistent after what is being billed as a referendum of his policies. He will need some success overseas. A trade deal with India would count among them. He also has a considerable armoury of tariffs to push for rebalancing the US trade deficit with countries like India. New Delhi should now have more negotiating room to secure an equitable arrangement with a principal trading partner.
NEXT STORY
End of reign of error? Expect Veto Corleone
ET BureauLast Updated: Nov 04, 2026, 11:17:00 PM IST
Font Size
Save
Synopsis
Donald Trump finds himself navigating turbulent waters post-midterm elections, with his policies under intense scrutiny, particularly regarding inflation and tariffs. While his presidential veto carries weight, concerns rise over its practicality in effective governance. The looming two years threaten potential institutional sabotage, leaving the future of Trumpism hanging in a balance as it grapples with ongoing grievances and dwindling electoral support.
Over his two presidencies, Donald Trump has aired his fondness for the poker term, ‘to hold all the cards’, many times. And in his cult of recklessness, he did ‘hold all the cards’ – until Wednesday’s confirmation of how much he has overplayed his hand. On inflation, on tariffs, on military adventurism, on MAGA Republicanism. His name may not have been on any midterm ballot on Tuesday, but Trumpism was on test, and has been found short. Trump’s overreach – despite his grab being the very thing that made him appealing to so many Americans in the first place – has been called out and resisted.
While Robespierre may not be the first name that comes to mind when thinking of Trump, the first blade has come down on America’s Reign of Error. Trump’s response was a display of a red MAGA cap bearing the one word, ‘Veto’. This only confirms the ‘Veto Corleone‘ aspect of Donald Lame Duck, where Congress will make offers he will constantly refuse. The presidential veto is undoubtedly powerful. But as we’ve seen in his spree of executive orders and rent-a-tariff, it’s a defensive weapon, not a governing strategy. Which makes the next two years potentially more dangerous than the preceding two.
Trump, constitutionally obliged to relinquish office in Jan 2029, is not temperamentally inclined to go gently into that good night. With a midterm knock, expect institutional sabotage, executive adventurism, manufactured emergencies, and an increasingly loud insistence on ‘vote chori’. So, declaring Trumpism dead would be premature. Its grievances, resentments and considerable electoral constituency will outlive this cease-and-desist verdict. Trumpism is tough to put back in its bottle. But a smarter version can be remade in America’s image, not in Trump’s.
