The Strategist

Democrats win Congress; US investment attractiveness may fall - Expert

11/07/2018 - 11:30

The US Democratic Party secured a majority in the lower house of the US Congress, local media reported, citing the vote count.

Roger Sayles
Roger Sayles
As a result of the mid-term elections, the Democrats have already managed to obtain the necessary minimum of 218 out of 435 seats in the House of Representatives. Thus, the lower house of Congress will now come under the control of the Democrats. In a number of states, the counting of votes has not yet been completed.

Earlier it was reported that the Republicans managed to guarantee a majority in the Senate, the upper house of the US Congress.

US President Donald Trump previously responded to the preliminary results of the elections, calling them extremely successful. “Great success is achieved tonight! Thanks to everyone,” he wrote on his twitter account.

In the mid-term elections, so named because they are held in the middle of the presidential term, all 435 members of the House of Representatives and 35 out of 100 senators, as well as some governors, were elected.

Experts noted that in the event that the Democrats succeeded in obtaining a majority in at least one of the chambers of the congress, this would allow them to limit the political powers of the Republican President Donald Trump, not giving way to many of his projects. Democratic Congressmen will be able to block or suspend some of Trump's initiatives, for example, the construction of a wall on the border of the United States and Mexico, since the implementation of such plans requires approval of Congress.

According to observers, these elections are an indicator of the attitude of Americans towards the current president, whose initiatives are often perceived ambiguously.

The return of Democrats to the House of Representatives may reduce investment attractiveness of the United States, experts say. SO, CCB International global strategist Mark Jolley noted that the elections have led people to overestimate the position of the United States as a direction for major investment and the consequences of this rethinking can be "destructive." Referring to the polls, the analyst says that the Democratic victory could disrupt global investment patterns, as some players will fear a political split in the US government.

According to the forecasts of a number of political scientists, a deadlock situation may arise, in particular, due to the fact that Democrats will block Republican attempts to cut taxes and abolish health programs created in the Obama era.

Jolley described bipartisan relations during the early years of Trump’s presidency as “ugly,” but noted that returning Democrats to the House of Representatives would only exacerbate the situation.

The strategist believes that the market’s response to the Democratic triumph will be "much less positive than we saw in the previous mid-term elections."