Democrats Take Congress and Challenge Trump Foreign Policy

Democrats have secured control of both chambers of the US Congress in the November 3, 2026, midterm elections, giving the opposition greater authority to challenge President Donald Trump's policies. The result could increase scrutiny of military operations involving Iran, future assistance to Ukraine, trade relations with Europe and federal spending.

According to CNBC, the Democratic victories give the party greater influence over congressional investigations, legislation, government funding and confirmation of presidential nominees. However, Trump retains substantial constitutional authority over foreign policy and executive decisions.

European and international reactions highlighted concerns about the consequences for diplomatic relations, security cooperation and global markets. Reuters, CNBC, NPR and Euronews reported differing assessments of the election's international implications.

Laurel Rapp, director of Chatham House's US and North America Programme, said the president would face stronger congressional scrutiny while retaining considerable freedom in international affairs.

"We are going to see a president that is somewhat constrained on matters of oversight and investigation, but on foreign policy, he does still retain a lot of latitude," Rapp told CNBC's "Squawk Box Europe."

Rapp identified the conflict with Iran as a major election issue, particularly because rising fuel prices, food costs and inflation have affected American households. Trump launched joint strikes with Israel on February 28.

"Republicans don't really have an off-ramp here at this stage. We know the Democrats will seek to take votes in the House and the Senate to constrain the Republicans, to restrain the administration on Iran war powers. But whether that will bind the administration is another matter," Rapp said.

She added that Democrats could use congressional spending authority to restrict financial support for military operations. Legislation requiring Trump to end US involvement would need two-thirds support in both chambers to override a presidential veto.

Holger Schmieding, chief economist at Berenberg, anticipated another round of bombing in Iran followed by a possible agreement to reopen the Strait of Hormuz by 2027. He also warned that congressional resistance could complicate expensive military operations.

"more trouble ahead" was Schmieding's assessment of Trump's political position as Democrats prepare to take control of the Senate.

Schmieding also described the possibility of additional military escalation as a concern, saying Trump might become "even more eager to pursue dangerous geopolitical adventures" despite congressional resistance to financing an expensive campaign.

Mitchell Reiss, a fellow at the defense and security think tank RUSI, predicted that Trump might replace Defense Secretary Pete Hegseth following the Republican defeat.

"Traditionally, presidents do replace cabinet officials. Certainly, after midterm results like this one, if you remember, George W. Bush replaced Donald Rumsfeld as Secretary of Defense after midterm losses, so that wouldn't be a surprise," Reiss told CNBC.

J.C. Lintzenich, a visiting senior fellow at the German Marshall Fund, cautioned against assuming that the election had substantially weakened presidential authority.

"Remember that this election changes the Congress; it does not change the president," Lintzenich told CNBC.

He emphasized that the administration would continue directing American foreign policy, including decisions involving Iran and the unresolved conflict between Russia and Ukraine.

"The President of the United States still has lots of power, lots of authority. We still have pending action in Iran. We still have an unresolved situation with Russia and Ukraine," Lintzenich said.

He said congressional influence would become more visible through spending decisions and oversight of existing legal obligations.

"What we'll now see is a little bit more congressional oversight, the application of funding, for example, Ukraine, that's required by statute and law," Lintzenich added.

Schmieding considered pressure on Ukraine a possible risk, although he described an unfavorable settlement imposed on Kyiv as a "tail risk." He also said Republican support for Ukraine could become less dependent on Trump's political influence.

"That can help to contain the risk of Trump trying to impose an unacceptable deal on Ukraine," Schmieding said, referring to Republican concerns about Russian President Vladimir Putin.

Ukrainian President Volodymyr Zelenskyy also emphasized the international significance of the American vote while speaking in Berlin.

"The world will be watching," Zelenskyy said.

He described the political situation as uncertain and warned that expectations could again be disappointed.

"Many hopes may once again end in disappointment," Zelenskyy said.

Christel Schaldemose, a vice president of the European Parliament, viewed the outcome as potentially favorable for Kyiv.

"The EU must continue the course of standing stronger and standing on its own two feet," Schaldemose said, emphasizing Europe's responsibility for its security and support for Ukraine.

European Council on Foreign Relations policy fellow Nevada Joan Lee warned that congressional approval did not necessarily guarantee that Ukraine would receive the allocated money. She said the White House had previously delayed spending approved funds until they expired at the end of the fiscal year.

"Europeans should treat earmarked funds as intent, not commitment," Lee said in a commentary published before the election.

European media portrayed the Democratic victory as a major setback for Trump. France's Libération described the result as "une vague bleue," while Britain's Daily Mail called it a "historic blue tsunami." The Times of India published the headline "midterm blues for Trump."

Ukraine's Kyiv Independent highlighted the potential benefits for Kyiv with the headline "Democrats seize control of Congress in blow to Trump, potential boost for Ukraine." Russia's state-run Rossiyskaya Gazeta presented a different interpretation.

"Brussels, brace yourself. After the Republicans' defeat, Trump's wrath will fall on Europe," the Russian newspaper declared in its headline.

Iran's Tehran Times connected the Republican losses to the conflict's economic consequences, publishing the headline "The Iran war comes home to hit Trump at the ballot box."

In Israel, coverage focused on the implications for American support for the country and the political consequences of Abdul El-Sayed's victory in Michigan's Senate race. The Times of Israel published the headline "Anti-Israel El-Sayed wins Michigan Senate race, pledges no money for 'apartheid, genocide.'" Haaretz highlighted the political significance of his victory.

"Abdul El-Sayed Shows Opposition to Israel Is No Barrier to Winning Battleground States," Haaretz reported in its headline.

Canada's Toronto Star characterized the election as a "rebuke" to Trump, while Mexico's El Universal published the headline "Setback for Trump."

Several international leaders responded cautiously, treating the midterm elections as an internal American political matter. Spanish Prime Minister Pedro Sanchez, however, openly welcomed the outcome.

"Yesterday, American society voted against policies that only impoverish. Against hate. Against machismo. Against climate denialism and against the privileges of the elites," Sanchez wrote on X.

South African President Cyril Ramaphosa also commented on the result while voting in his country's municipal elections.

"The people of America have spoken," Ramaphosa said.

He expressed hope that the political change would improve diplomatic engagement between Washington and other governments.

"I do think that this is going to introduce a new era in world relations…. We're hoping that on a bilateral basis there will be a coming together of minds," Ramaphosa added.

Russian Deputy Foreign Minister Sergei Ryabkov warned that Democratic control could complicate relations between Washington and Moscow.

"The approach of the activist wing of the Democratic Party towards Russia is extremely negative. There's nothing new in that," Ryabkov told the state news agency RIA-Novosti.

German Defense Minister Boris Pistorius congratulated Democrats on their "historic victory" while maintaining Berlin's commitment to cooperation with Washington.

Norwegian Prime Minister Jonas Gahr Stoere described the election as a "powerful political signal about a change of course among American voters."

He also highlighted differences between the Democratic Party's positions and the current administration's approach to international affairs.

"voices are now emerging in American politics that are closer to us than the president and the administration have stood for, for example on climate and environment, and in foreign policy and development aid policy," Stoere told Reuters.

London Mayor Sadiq Khan congratulated Democrats, while UK Prime Minister Andy Burnham had issued no immediate response. Khan praised the campaign's emphasis on household costs and political unity.

"Congratulations to Democrats on a huge victory last night. With a focus on hope, unity and supporting families with the cost of living - their campaign was a true rejection of the damaging and divisive politics of Donald Trump," Khan wrote on X.

China's Foreign Ministry described the election as an American domestic matter while expressing willingness to maintain diplomatic engagement.

"are an internal affair of the United States," a ministry spokeswoman said during a daily press conference.

She also outlined Beijing's position on continued bilateral cooperation.

"China is willing to continue working with the U.S. to…strengthen communication, properly manage differences, expand cooperation, and build a constructive, strategically stable China-U.S. relationship based on the principles of respect, fairness, and reciprocity," the spokeswoman said.

Japan's Chief Cabinet Secretary Minoru Kihara said the US-Japan alliance would remain central to regional security regardless of the election results.

He described the partnership as "remains the cornerstone of Japan's foreign and security policy" and essential to "maximizing its national interests" amid international uncertainty.

Iranian Parliament Speaker and chief negotiator Mohammad Baqer Ghalibaf welcomed the result, connecting the Democratic victory to American opposition to the war.

"Conscience or the cost of living, Americans said NO TO WAR, and we endorse this message. If the US govt betrays their public will to serve international paymasters and blackmailers, it will learn our NO comes with a Nightmare," Ghalibaf wrote on X.

Israel's political establishment also examined the implications of the American election following Benjamin Netanyahu's loss of his parliamentary majority in Israeli elections on October 27.

Israeli-American analyst Mairav Zonstein described the two election setbacks as politically significant for Netanyahu.

"In some ways Netanyahu lost two elections in the last week," Zonstein said.

Opposition leader Yair Golan argued that the American result demonstrated Netanyahu's political difficulties.

"just how toxic Netanyahu is among both Democrats and Republicans," Golan said.

Another opposition leader, Yair Lapid, linked the Democratic victory to Netanyahu's prospects of forming a government.

"eliminate any possibility of a unity government led by Netanyahu," Lapid said.

Economic implications also emerged across European financial markets. Euronews reported that the Euro Stoxx 50 rose 0.8%, Germany's DAX gained 0.6%, and Spain's IBEX 35 advanced 1.6% during morning trading.

US stock futures also recovered, with S&P 500 contracts increasing 0.2%. Banking shares advanced, while clean energy companies benefited from investor expectations surrounding a potentially different congressional policy environment.

Deutsche Bank gained 3.6%, Intesa Sanpaolo rose 3.3%, and Commerzbank and Société Générale each advanced 3.1%. Danish renewable energy developer Ørsted climbed 7.3%, while turbine manufacturer Vestas gained 5.2%.

Defense companies moved in the opposite direction. BAE Systems fell 5.2%, Hensoldt declined 4.9%, Thales dropped 4.5%, Saab lost 3.8%, Rheinmetall decreased 3.2%, Dassault Aviation slipped 2.8%, and Leonardo fell 2.7%.

Precious metals also strengthened. Gold increased 2.7% to $4,035 an ounce, while silver climbed 4% to $51.76. The euro gained 0.5% against the dollar to $1.1247.

US Treasury yields declined, with the 10-year yield falling 3.7 basis points to 4.93%. The two-year yield reached 4.61%, while the 30-year yield stood at 5.30%. Bitcoin rose 1.3% to approximately $78,300, and Brent crude traded near $104 a barrel.

Trade policy remains another concern for European governments. Euronews reported that Trump's authority to impose tariffs could remain largely intact because his administration had shifted to Section 301 of US trade law after the Supreme Court struck down emergency tariffs in February.

James Smith, a developed markets economist at ING, said trade policy remained an area where the president could act independently of Congress.

"Like foreign policy, trade is another power the president can wield unilaterally without Congress," Smith said in a note published before the election.

Consequently, Democratic lawmakers may hold hearings and delay presidential nominees but face greater difficulty directly preventing additional tariffs against European trading partners.

Financial analysts also disagreed about whether political gridlock would benefit investors. Diego Barnuevo, a market analyst at Ebury, considered Democratic control potentially favorable for fiscal discipline.

"We think that a Democratic sweep would be neutral to mildly positive for the fiscal outlook. Congress could restrain Trump's expansionary agenda and, with it, the deficit," Barnuevo said.

Yardeni Research President Ed Yardeni offered a more cautious assessment, particularly concerning negotiations over the federal debt ceiling.

"Wall Street traditionally welcomes political gridlock because it reduces the likelihood that Congress will pass extremist legislation. But this time could be different," Yardeni said in a note published Monday.

Luca Bindelli, head of investment strategy at Lombard Odier, said historical patterns showed that 10-year Treasury yields had declined by approximately 20 to 25 basis points on average during the three months following previous midterm elections.

The next major institutional change will come in January 2027, when the newly elected Congress takes office and Democratic lawmakers assume control of congressional committees and their oversight responsibilities.