Democratic sweep reshapes Washington's agenda on tariffs, probes

· Politics · United States

A Democratic landslide in the US midterm elections, described by President Donald Trump as a 'giant step back', has set up a bitter showdown with Congress when the new majority takes control in January. Trump vowed to bounce back 'bigger and stronger than ever before' and ordered the Justice Department to examine Democratic threats to impeach members of his administration, calling it 'extortion'. Incoming House leader Hakeem Jeffries said ending Trump's tariffs is a top priority and that he is a 'hard yes' on impeaching Defense Secretary Pete Hegseth. Democrats also won key state attorney-general races, plan probes of Elon Musk and Stephen Miller, and their victory appears to doom Trump's $1.5 trillion defense budget request. Markets are weighing the shift: Treasury bonds are seen as a winner, the AI trade was hit, cryptocurrencies slid to two-month lows and stock futures rose modestly ahead of inflation data.

Why it matters：Divided government changes expectations for US tariffs, defense spending and oversight of big tech, with knock-on effects for trade partners and global markets.

Key points

  • Jeffries said ending Trump's tariffs is a Democratic priority.
  • Democrats flipped attorney-general offices in five Republican-leaning states.
  • Trump ordered the Justice Department to examine Democratic impeachment threats.

Sources (original reporting)

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