Kuala Lumpur, Malaysia – Across the Asia-Pacific region, governments and businesses reeling from the energy shock of the United States and Israel’s war on Iran are watching Tuesday’s US midterm elections closely. Many want to see “enormous changes” during the rest of President Donald Trump’s term, analysts say, from the war on Iran to his policies on trade and tariffs. But few expect that to happen, even with the Democrats poised to take the House of Representatives, and potentially the Senate, from Trump’s Republican Party.
Before the start of the conflict in January, the region took in most of the Gulf oil and gas that passed through the Strait of Hormuz. When Iran closed the chokepoint in response to the US and Israel’s strikes, much of the region was left facing shortages. The Philippines, which relies on the Gulf for more than 90 percent of its crude oil imports, has been under a national energy emergency since March.
Soaring fuel costs have drained the foreign exchange reserves of the region’s poorest economies – Cambodia, Laos, Myanmar and East Timor, according to the Institute of Southeast Asian Studies (ISEAS)-Yusof Ishak Institute in Singapore. Indonesia, Malaysia, Thailand and Vietnam have also spent heavily on fuel subsidies to shield consumers, it said. Public opinion in the Asia-Pacific region remains firmly opposed to the war, but Okun said a Democratic-controlled US Congress was unlikely to force Trump to end the eight-month conflict.
If a Democrat-controlled Congress passes legislation restricting military operations or cutting funding for them, Trump can veto it. Overriding a veto requires a two-thirds majority in both chambers, which Democrats are almost certain to fall short of. On trade and tariffs, too, analysts see little room for Congress to rein in Trump.
The US president rattled global markets last year when he imposed “reciprocal” tariffs of 10 percent to 50 percent on some 90 countries, with the aim of shrinking the US trade deficit. Asia was again hit harder than most. Cambodia faced a 49 percent tariff and Laos 48 percent.
Vietnam was slapped with 46 percent and Myanmar 45 percent. After the Supreme Court struck down those tariffs in February, the Trump administration turned to other tools. In July, it imposed tariffs of 10 percent and 12.5 percent on goods from 60 trading partners, accusing them of failing to stop imports made with forced labour.
Extract — continue reading at the source.
