Asia's midterm bill: new Congress, same tariffs

<p><em>Special Reporting from LSN News, adapted from today's Asia Unfiltered episode. <a href="https://youtu.be/AQrHmNaNRl4" target="_blank" rel="noopener">Watch the video on YouTube.</a></em></p>

<p>Americans vote in the midterm elections today. Asia does not get a ballot, but it does get the bill. The question for the region is whether a new Congress in Washington will bring any relief, or whether Asia is hoping for a change that will not come.</p><h2>Markets go into the vote nervous</h2><p>In Seoul, the KOSPI closed down 3.59 percent on Tuesday, Yonhap reported. Samsung Electronics fell more than 4 percent and SK hynix lost about 5 percent. Taiwan's benchmark dropped about 3.6 percent. The main driver was a fresh wave of doubt about the cost of the artificial intelligence boom, but Yonhap said investors also stayed cautious ahead of the start of voting in the United States, where President Donald Trump's Republican Party faces an uphill fight to keep its majority in Congress.</p><p>The stakes for the region are high. Outside the Middle East, Al Jazeera reports, no region has been hit harder by the war on Iran than the Asia-Pacific. The Philippines relies on the Gulf for more than 90 percent of its crude oil imports and has been under a national energy emergency since March. Singapore's ISEAS-Yusof Ishak Institute says soaring fuel costs have drained the foreign exchange reserves of Cambodia, Laos, Myanmar and East Timor, while Indonesia, Malaysia, Thailand and Vietnam have spent heavily on fuel subsidies.</p><p>Then there are tariffs. After the US Supreme Court struck down the so-called reciprocal tariffs in February, the administration turned to other tools. In July it imposed tariffs of 10 and 12.5 percent on goods from 60 trading partners, accusing them of failing to stop imports made with forced labour. In Asia, that list includes China, Japan, South Korea and seven Southeast Asian nations.</p><h2>What Congress can and cannot change</h2><p>On the two things Asia feels most, very little. Steven Okun, chief executive of the Singapore-based consultancy APAC Advisors, told Al Jazeera: “Tariffs don't change. The war doesn't change.” The reason is power. President Trump can veto any bill that restricts the war or rolls back tariffs, and overriding a veto needs a two-thirds majority in both chambers, which Democrats are almost certain to fall short of.</p><p>Seoul hears the same message. The Asia Business Daily reports that Korean trade experts see no tariff relief coming, and some expect the pressure to rise after the vote. Jeong Ingyo, a former head of the Office of the Minister for Trade in Seoul, told the paper: “The pressure will by no means ease.”</p><p>There is one narrow opening. Stephen Olson, a visiting fellow at ISEAS, argues that a strong rebuke of Trumpism could embolden pro-free-trade Republicans, and that a Democratic Congress could push for carve-outs that give Southeast Asian exporters what he calls “a modicum of relief.”</p><h2>The awkward part: chips and China</h2><p>The one area where Congress is expected to act is China and chips, and that cuts close to Asia's own champions. Okun says the next Congress will pass tougher technology controls whichever party wins, because both parties agree on them. They include the Chip Security Act, which would require companies to verify that advanced AI chips stay in authorised locations, and the MATCH Act, which would press allies to align their controls on chipmaking equipment with Washington's. In Seoul, analysts expect a Democratic House to step up oversight of chip export licences to China.</p><p>Okun adds a twist: the person least restrictive on China right now, he says, is the US president. Trump has met Xi Jinping twice this year, and to protect the trade truce, Al Jazeera reports, he has held off approving a $14 billion arms package for Taiwan, which would be its largest ever.</p><p>For Asia, these midterms look like a reshuffle, not a rescue. The energy shock and the tariff wall both run through the White House, and a new Congress cannot easily touch either. What it can do is tighten the rules on chips and China, and those rules would land on Seoul, Taipei and Tokyo, not on Beijing alone. LSN's read: governments across Asia should plan for more of the same from Washington, with tighter chip rules on top.</p><p>Three things to watch: whether the Democrats take the House, and possibly the Senate; whether a weakened White House pushes harder on trade to show results, as some Korean experts expect; and the chip bills, which could move whichever party wins.</p>

<h2>Sources</h2>

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<li><a href="https://en.yna.co.kr/view/AEN20261103007951320" target="_blank" rel="noopener">Yonhap News Agency, &quot;(LEAD) Seoul shares dip over 3 pct amid escalating AI woes&quot;, 3 Nov 2026 15:57 KST</a></li>

<li><a href="https://theedgemalaysia.com/node/824327" target="_blank" rel="noopener">Singapore banks drag index lower&quot;, 3 Nov 2026</a></li>

<li><a href="https://www.aljazeera.com/news/2026/11/2/war-tariffs-and-china-what-the-us-midterms-mean-for-the-asia-pacific" target="_blank" rel="noopener">Al Jazeera (Samantha Ho), &quot;War, tariffs and China: What the US midterms mean for the Asia-Pacific&quot;, 2 Nov 2026</a></li>

<li><a href="https://www.asiae.co.kr/en/article/2026110308381109334" target="_blank" rel="noopener">The Asia Business Daily, &quot;[U.S. Midterm Elections: A Day of Reckoning] Hegemonic Pressure Set to Intensify After Election... South Korean Industries on Edge&quot;, 3 Nov 2026</a></li>

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