The outcome of US mid-term elections this week that saw the Democrats winning control of the House of Representatives bodes well for South Africa and international trade relations, according to two leading analysts.
The poll outcome also saw the rand firming slightly against the US dollar at R13.9750.
Independent political analyst Ralph Mathekga and Econometrix chief economist Azar Jammine yesterday agreed that US President Donald Trump’s unilateral foreign policy decision-making would now be kept in check by the Democrats.
Mathekga said the mid-term elections also showed that Americans were willing to restrain Trump.
“There is concern about Trump’s policies and impact on global trade relations,” he said. “Now, Trump is exposed and he needs Congress to pass key laws. The expectations are that the Democrats will prevail and Trump will have to seek cooperation on many key decisions.
“However, Trump is a unilateralist who tends to go it alone. He will fight hard for the remaining years of his presidency. He might even become too aggressive.”
Jammine concurred: “The outcome means that Trump will not be able to carry on with the destructive policies that have triggered the China-US tariff wars.
“On the whole, the US midterm elections outcome should be positive for South Africa and for the world. He has weakened the US dollar, because he was executing tasks that put more pressure on the US fiscus.”
The Democrat’s victory, the analysts said, meant that Republicans would no longer be able to pass legislation through Congress only.
The Democrats’ new majority meant they now have the power to subpoena, making it possible to investigate the Trump administration.
The US-China trade standoff is having a negative impact on international trade.