Businesses brace for greater scrutiny of Trump’s tariff policies

The Democrats' big win in the US midterm elections might encourage Congress to exert more control over trade policy and examine President Donald Trump's agreements with China, say experts. However, a big change in Washington's trade policy seems unlikely, according to Stephen Olson, a former US trade negotiator. Even though Trump still has wide-ranging authority over tariffs, changes are only expected in small ways, he added.

Democrats now hold both chambers of Congress for the first time since Joe Biden's first two years in office. Deborah Elms, head of trade policy at the Hinrich Foundation think tank, also believes Congress could increase scrutiny of trade policy through more investigations and hearings. However, she notes that radical changes are unlikely due to the president's veto power.

Elms expects lawmakers to question how the US Trade Representative and Department of Commerce justify tariffs and decide which companies receive exemptions. Yet, she warns that China critics in Washington, who Trump had previously kept at bay, might adopt a more skeptical view of China. After months of back-and-forth tariff hikes, export controls, and threats in 2025, the US and China have managed to maintain a delicate truce in their trade relationship.

Following a meeting in September, Chinese President Xi Jinping and Trump agreed to modest steps, like extending the trade truce and setting up a board of trade to oversee some reciprocal tariff reductions. However, according to Chen Fengying, a Beijing-based expert on US-China relations, the election results are not likely to bring about significant changes in trade relations with China.

He argues that both the Democrats and Republicans are equally committed to containing China, and it is improbable that two major powers can completely avoid friction.