Did Trump’s inflation fight cost the Republicans both houses of Congress?

Import tariffs and war with Iran have pushed up prices for the White House’s key voters.

In the midterm elections on November 3rd 2026, the Democratic Party wrested control of both houses of the US Congress from the Republicans. Democrats took seven Senate seats from their opponents, winning even in deeply conservative Texas, Kansas and South Carolina. Historic records were set by 42-year-old Abdul El-Sayed in Michigan, who became the first Muslim in the upper house, as well as by Gina Hinojosa in Texas and Xavier Becerra in California. In Georgia, Keisha Lance Bottoms secured a victory, while in New Mexico and Minnesota, indigenous representatives Deb Haaland and Peggy Flanagan took high-ranking posts.

The shift in control on Capitol Hill sharply redraws the balance of power in Washington ahead of the second half of Donald Trump’s presidential term. From January 2027, the Democratic majority in the House of Representatives and the Senate will have the direct authority to bring any bill to a vote and block White House initiatives. Voters have punished Mr Trump for the rising cost of living, just as they did to Joe Biden’s administration two years prior. Democrats have ended a long drought in states where the party had not won for decades.

The Republican defeat in the midterms has finally shattered the 2024 coalition, which came to power on slogans of lowering prices and rejecting foreign intervention. This analysis answers the key questions of this new reality: how Mr Trump’s decisions on import tariffs and escalation with Iran turned neutral voters away, why stockmarkets and the tech sector are bracing for a wave of subpoenas and investigations, and whether Congress can change the course of foreign policy amid a fierce standoff with the administration.

Attempts by the Speaker of the House and Republican leaders to explain the defeat as a standard midterm cycle are undermined by electoral statistics. Donald Trump’s approval rating on election day fell to 38%, the worst figure for an incumbent head of state in nearly twenty years. The share of citizens expressing open protest against the administration’s course proved unprecedentedly high. Some 43% of exit-poll participants stated directly that their vote was aimed against Mr Trump. This exceeds even the figures from the 2018 elections, which were a rout for the Republicans.

The main reason for the collapse of the president’s electoral base was deep dissatisfaction with the country’s economic situation. More than 60% of voters held the White House’s economic policies directly responsible for persistent high inflation and the rising cost of living. Attempts by Mr Trump’s team to shift the blame onto the previous administration’s legacy or the actions of foreign opponents failed to convince the public. For 87% of Americans, the rapid rise in petrol and diesel prices at the pump remained the key factor in their daily cost of living.

The administration’s foreign-policy decisions only inflated the bills of American households and deepened public discontent. The armed operation against Iran, launched by the president unilaterally without consultation or official congressional approval, was considered a mistake by 63% of voters. A sharp rise in global energy prices, combined with new import tariffs, hit the pockets of millions of families, turning the fuel issue into the key detonator of protest.

As a result, Mr Trump’s electoral coalition crumbled in the very demographic groups that had delivered him victory two years earlier. The attempt to impose the idea that the White House was managing the economy effectively collided with the harsh reality of receipts at petrol stations. Voters demonstrated clearly: no amount of rhetoric compensates for a fall in purchasing power.

The financial and economic mechanism of this electoral shift was determined by two key White House decisions in trade and defence. Import tariffs introduced in 2025 triggered a systemic rise in the cost of foreign goods across the supply chain, while the military operation against Iran sharply pushed up prices at American petrol stations. Against this backdrop, in 2026 the president demanded an increase in the military budget by 67% — to an astronomical $1.5trn — while simultaneously cutting social spending. Voters faced a decline in purchasing power alongside a sharp rise in government spending on foreign conflicts.

The rapid rise in the cost of living instantly destroyed the electoral coalition that brought Mr Trump to power. Young people under 30 supported Democratic candidates by 72% to 25%, whereas two years earlier Republicans had lost this segment by only 5 percentage points. A similar reversal was shown by Latino voters: 62% voted for the Democrats and only 35% for the Republicans. By comparison, in 2024, 46% of Latinos voted for Donald Trump, securing him an advantage in swing states.

Republicans suffered equally significant losses among men and independent voters. The male vote split exactly down the middle, depriving the party of the double-digit lead recorded in the 2022 elections. Independent citizens preferred the Democrats by a double-digit margin. Finally, the group of swing voters — about 15% of the electorate, who hold a dislike for both parties — supported the Democratic camp this time, decisively overturning the president’s past results.

The Democratic Party’s success does not signify a surge in affection for its platform. Opinion polls record an unfavourable view of the Democrats among 53% of voters. The opposition’s victory was secured by a purely protest vote against the backdrop of high inflation. The mood of the electorate followed a basic economic calculation: people voted against the decline in real incomes.

The pressure from the new congressional majority will be felt first by giants of the tech sector and artificial-intelligence developers. About 76% of citizens are explicitly opposed to the construction of large-scale data centres near residential areas. Yet 30% of all new capacity was planned to be deployed in Texas by 2028. The newly elected Democratic governors have already declared their readiness to pause such construction in response to public fears over rising electricity tariffs. On the night after the election, futures for the Nasdaq 100 tech index fell by more than 2% amid expectations of strict regulation.

Financial markets reacted to the change in power with a reallocation of capital and a fall in the American currency. The dollar index against a basket of major currencies fell by 0.25% to 101.22. Traders reduced dollar positions on expectations that Congress would block new trade tariffs and limit military escalation. A decline in oil prices and increased investor appetite for risk supported major global currencies.

Lawmakers are also preparing a series of large-scale investigations into the president’s family business and his key supporters. Committees in the House of Representatives are opening legal vacancies to examine Donald Trump’s commercial crypto-projects. Opponents accuse the White House of dismantling anti-corruption oversight mechanisms and personal enrichment through digital tokens. For large IT companies and businessmen close to the administration, the change in leadership on Capitol Hill means an inevitable wave of subpoenas for open hearings.

However, the opposition will not gain real levers of influence over the executive branch immediately: the new Democratic majority in Congress only takes office in January 2027. Even after officially taking office, Democratic legislative initiatives will face an institutional barrier. To override a presidential veto by Mr Trump on key bills — whether it be a blocked military budget or foreign aid — the opposition will need to gather two-thirds of the votes in both houses. Nevertheless, the houses can stall the confirmation of appointments and cut military spending items, forcing the White House to request authorisation to continue the conflict in Iran.

The electoral rout has already forced the Republican administration to prepare personnel changes in key departments. The White House’s foreign-policy bloc expects a rotation: Secretary of State Marco Rubio may be replaced by the US ambassador to India, Sergio Gor, who previously headed the administration’s personnel office. As The Washington Sun notes, Mr Rubio is prepared to leave the State Department to prepare for the 2028 or 2032 presidential races. Mr Gor himself, who was born in Tashkent and worked with Senator Rand Paul, publicly denies possible appointments, but rumours of a team change reflect deep confusion within the apparatus after the loss of Congress.

Personnel reshuffles and procedural manoeuvres on Capitol Hill do not cancel out the harsh lesson of the recent vote. For the second time in four years, the American voter has proven that foreign policy and ambitious trade wars are devalued when they hit the pockets of their own citizens. Any party in Washington is a hostage to the basic mathematics of households. The election result has once again reminded the administration of simple rules: the chief and uncompromising censor of any American government remains the figure on the petrol station information board.