A nation divided

As results streamed in from across America in the nation’s mid-term elections held on November 6, the only thing that became clear is that the country is even more divided than in 2016, when Trump stormed into the presidency.

Though Trump was not even on the ballot, he still campaigned relentlessly for his Republican party.

The American parliament is made up of two chambers, the lower (House) and the upper (Senate). Americans also directly vote for a single individual to become President.

The 2018 election was a mid-term vote, midway between two presidential election years, 2016 and 2020. All 435 seats in the House and a third of the 100 Senate seats were in play. Trump ran in 2016, so he is not up for re-election until 2020.

The results were a mixed bag. The Democrats wrested control of the powerful House from the Republicans, giving the former a sweet victory after their humiliating loss in 2016. But the Republicans solidified their margins in the Senate by at least four seats. They also held on to an important governor seat in Florida, beating back a spirited challenge from Democrats.

This election was all about Trump. Despite a roaring economy, low unemployment and a nation not as roiled in war as under prior presidents, most Indian Americans, minorities, and college-educated women went for the Democrats as a huge protest vote against Trump’s authoritarian, incendiary, win-at-all-costs rhetoric. Older white males and women stayed with Trump’s Republican partyshrugging off his style for substance. So America returns to sharply divided government. The House will use its authority to begin launching various investigations of the Trump administration, issuing subpoenas for Trump’s taxes and his family’s business dealings.

There’s also the unfinished Russia investigation by Special Counsel Robert Muller. If there’s the slightest hint in the final report which implicates anyone close to Trump, many House Democrats would love for Trump to be impeached and bring on him the ignominy that Republicans delivered to President Clinton. But for Trump to be removed from power, 67 senators of the 100-member Senate have to approve any House impeachment. With Republicans already at 55 seats, Trump is safe.

The House controls America’s purse; tax and spending bills originate there. With Democrats in control, they will try to reverse Trump’s policies of tax cuts, limited regulation, cuts to healthcare and restrictive immigration. Senate Republicans will faithfully stall. Trump will likely veto any bill that comes out of both House and Senate that he doesn’t like, resulting in gridlock and government shut-downs. Markets don’t like infighting and inaction. With the prospect of policy grinding to a halt, the American economy could finally cool, weakening the dollar and bolstering the rupee.

But major Indian issues — such as H -1B/H-4 visas, tariffs, China, Afghanistan, Iran, and Pakistan — will likely remain in place because the Trump administration remains firmly in power. Trump’s unbending vision for over 30 years has been to take care of his country first and scuttle pacts, treaties and other agreements which have been the staple of the post-World War II international order on trade, immigration, and security. These elections were considered to be a referendum on Trump’s policies and many of America’s allies (including India) were silently hoping for an election rout of his party, in the hope that Trump would be tamed.

But Trump actually won rather resoundingly for his party in the Senate, so expect him to double down on his nationalistic approach even more. The next two years will be painful.

The writer is Managing Director, Rao Advisors LLC, US

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