Search ForexCrunch

Brian Martin and Daniel Wilson, analysts at ANZ explained that  on 6 November 2018 the US will head to the polls to vote on its legislative government, the 116th Congress, commonly known as the midterm elections.

Key Quotes:

“All 435 members of the House of Representatives and 35 of 100 Senate seats will be decided.  

The race for the House of Representatives is too close to call with the majority of political analysts and media suggesting about 115 seats are up for grabs. Some of them are leaning towards a political party, while others are too close for even the experts to predict. These seats are certainly enough to sway the majority in the House.

However, the Democrats face a steep uphill battle in the Senate. Of the 35 seats to be decided in November, 26 are currently held by Democrats and only 9 are held by Republicans. The Democrats would have to successfully defend all 26 seats and win over 2 Republican seats to have a majority in the Senate.  

In this note, we take an economic snap shot on a state-by-state basis to highlight some common themes among states with important Senate races. In the chart below we highlight one of the President’s most contentious policies on trade (China tariffs) with the share of each state’s exports to and imports from China. In key states like Nevada, Missouri, and Florida the economic impacts of these tariffs may just be starting to be felt as the election nears.    

For the Republicans, losing the House would imply their ability to put forth new laws would be hampered and further reform on contentious policies (immigration, healthcare) would likely hit a stand still. The President’s reform agenda would stall. However, Democrats would also not be able to implement new policy with the Senate unlikely to approve motions, which will be required before hitting the President’s desk. If both the House and Senate majorities change, the President still holds veto power, a tool used at least 12 times each by the last ten Presidents.”