How the Democrats’ Midterm Sweep Changes China’s Calculus on Trade, Technology and Taiwan
China says the U.S. midterm elections are an internal affair, but Beijing is watching the results closely. On Nov. 4, Foreign Ministry spokesperson Mao Ning declined to comment on the outcome while saying China would work with the United States to carry out the consensus reached by Xi Jinping and Donald Trump and build a constructive and strategically stable relationship.
The reason is practical. Democrats now control both chambers of Congress, and that changes who in Washington can move policy on the issues that matter most to Beijing. Tariffs, which are set mainly by presidential order, are one matter. Export controls on advanced technology and arms sales to Taiwan, which Congress can push through legislation, are another.
On trade, the stakes are immediate. After tariff rates between the two countries climbed into triple digits early in Trump’s second term, the two sides reached a truce that expires in January. With Democrats in control of Congress, Trump may find it harder to use tariffs freely in negotiations with China, said Wu Xinbo, dean of the Institute of International Studies at Fudan University in Shanghai.
But Democrats face their own limits. Tariffs are popular with unions, blue-collar workers and small businesses, groups that form part of the Democratic base, said Drew Thompson, a senior fellow at the S. Rajaratnam School of International Studies in Singapore. Congress would also be reluctant to back measures that sharply raise costs for American consumers or increase the risk of conflict, said Patricia Kim, a foreign policy fellow at the Brookings Institution in Washington.
Technology is where Congress can matter most. Caixin, a Chinese financial outlet, said the Democratic sweep increased the chances that bills on foreign investment screening, critical mineral supply chains and export controls on advanced technology will pass, and that Trump is unlikely to veto them. One pending measure, the MATCH Act, would require the government to identify semiconductor manufacturing equipment and Chinese facilities subject to restrictions and press allies to adopt equivalent rules.
The AI race is part of the same calculation. Democrats campaigned on restricting data center construction, and voters approved more than 40 measures halting data center construction on election day. Because data centers are needed to keep American AI research moving at full speed, a slowdown in building them could give China an advantage in the competition for AI leadership.
Taiwan is the sharpest flashpoint. The Trump administration approved a record 14 billion dollar arms sale to Taiwan last December but has held off on carrying it out, and Trump said in May that arms sales could be a bargaining chip in talks with China. Beijing demands that Washington stop the sales. A Democratic Congress may press Trump to resume them next year, Wu said. Chen Dongxiao, president of the Shanghai Institutes for International Studies, said Congress has long been dissatisfied with the delay and that lawmakers from both parties could now apply more substantive pressure to speed up the sales.
There is also a paradox in the new balance of power. Trump began his second term threatening Beijing with another trade war, but after two years of confrontation, Xi may now see Trump as a check on even tougher policies from Congress. Trump still holds broad authority over foreign policy, but with less control over Congress he has fewer bargaining chips and less ability to deliver on deals with Xi. Beijing can no longer manage Washington through the president alone, Bloomberg noted in its analysis of the new dynamic.
The broad expectation among Chinese experts is continuity rather than rupture. China policy already commands bipartisan agreement in Washington, and foreign policy rests heavily on presidential authority, Chen said. A senior Chinese official said the midterms may reshape the political landscape without delivering a massive disruptive blow to the relationship. Human rights issues involving Xinjiang and Tibet were also cited as potential flashpoints.
The next test comes soon. Xi and Trump are scheduled to meet again on the sidelines of the Asia-Pacific Economic Cooperation summit in Shenzhen on Nov. 18 and 19, and discussions are underway about a possible trilateral summit involving the United States, Russia and China.