Nov 4 (Reuters) - The drubbing for Donald Trump's Republicans in US midterm elections could embolden some trade partners to push back against his combative policies, although they may need to tread lightly to avoid provoking him in his final two years in power.
Democrats captured majorities in both the Senate and House on Tuesday, as US voters delivered a stinging rebuke for Trump's policies, including his tariffs, blamed alongside the Iran war for persistent inflation.
That could hand economic rival
China a perceived upper hand in ongoing talks, prompt allies in Asia to slow-walk hundreds of billions of dollars in investment commitments, and give Europe more predictability over trade issues that remain unresolved.
But some partners still see choppy waters ahead, with Trump showing little sign of accepting voters' verdict on his tariff policies that have upended global trade.
"US protectionism won't simply disappear," said Bernd Lange, chair of the trade committee in the European Parliament.
"A weakened Trump could become even more aggressive and unpredictable. A lame duck could quickly turn into an angry duck."
Rajiv Bhatia, a former Indian diplomat and distinguished fellow at Gateway House think tank, said: "A Democratic victory will not necessarily make Trump more accommodating towards any country."
ALLIES HOPE FOR EASIER RIDE
Among countries that may be quietly hoping for an easier ride are America's closest Asian allies. Japan has promised $550 billion and South Korea $350 billion in US investments in deals intended to placate Trump.
Heo Yoon, economics professor at Sogang University in Seoul, said countries might now feel less pressure to fulfill such commitments: "Democrats seem to perceive that the investment commitments were forced on allies."
But Kazuhiro Maeshima, a professor of US politics at Sophia University in Tokyo, said the allies will not easily be able to back out. “The tariff issue is not over. If Japan’s response is slow, calls for additional tariffs could resurface," he said.
South Korea has become a notable lightning rod for Trump's anger at countries he believes have not lived up to investment pledges.
Most recently, Seoul pushed back on Trump's assertions that it had agreed to fund Alaska LNG, a major pipeline. Ban Kil-joo, international relations professor at Korea National Diplomatic Academy, said scrutiny from Congress over such projects could give Seoul more time to review them.
South Korea's Foreign Ministry said it would continue to discuss economic and trade issues with the US administration, Congress and states, regardless of changes in the composition of Congress.
QUARRELS STILL LOOM FOR EUROPE, INDIA STILL SEEKS DEAL
In Europe, transatlantic trade tensions have largely been eased by a series of deals that have so far limited the impact of Trump's US tariff onslaught.
But there are still potential quarrels, including whether Trump will retaliate against European countries that impose a digital services tax on US tech giants, and against a €3 billion loan of public money to European aircraft maker Airbus.
For India, still negotiating trade deals with the United States, the midterm results could provide an incentive to adopt a wait-and-see approach.
India's trade minister earlier this month said the first phase of an India-US trade deal was in the final stages of drafting, but reiterated that New Delhi would proceed only if it secures an advantage over competing exporters.
NO FREE REIN WITH BEIJING
The biggest US rival is China, which struck a trade truce with Trump that expires in January. Beijing may look for ways to use Trump's political fragility to strengthen its hand, but also may find it harder to win him over with Congress looking over his shoulder.
"Xi Jinping will recognize that Trump's authority has been greatly weakened by these results, and will no doubt be thinking about ways of exploiting that," said Saul Eslake, an economist at Corinna Economic Advisory in Australia, referring to China's leader.
The US president has gone to great lengths to improve relations with Xi. A Democratic-controlled Congress may constrain his ability to offer sweeteners for future deals.
"Democrats are unlikely to give Trump free rein on deals with Beijing," said Alicia Garcia-Herrero, chief Asia-Pacific economist at Natixis, noting they had already criticized Trump's summits with Xi for limited substance on key issues like AI.
A Democratic Congress is more likely to support tighter tech export controls and scrutiny of supply chains for AI and semiconductors, which will give Trump less flexibility on concessions impacting those high-growth segments, she added.
China's foreign ministry spokesperson Mao Ning told reporters on Wednesday that the midterms were an internal matter for the United States and that Beijing would continue to manage differences and expand cooperation with Washington.
(Reporting by Jihoon Lee, Heejin Kim and Kyu-seok Shim in Seoul, Jaspreet Singh Kalra in Mumbai, Saurabh Sharma in Delhi, Kevin Yao and Liangping Gao in Beijing, Tamiyuki Kihara in Tokyo, Scott Murdoch in Sydney and Philip Blenkinsop in BrusselsWriting by John Geddie and Mark JohnEditing by Peter Graff)
