Business · Economy · 5 hrs ago
Democrats’ midterm gains constrain Trump at home, but not abroad
Democrats won majorities in both chambers of the US Congress in the midterm elections, making it harder for President Donald Trump to pass laws without compromise.
The result limits his ability to push through domestic policies, but the president retains wide powers over foreign policy.
That matters because the United States has recently carried out a limited strike on an Iranian island, and officials have discussed possible military action against Iran.
A renewed conflict could drive up oil and gas prices, adding to inflation and raising costs for households and businesses.
In Germany, higher energy costs or new US tariffs could increase pressure on companies and jobs, though experts say the economy also faces longer-term problems of its own.
Europe’s business leaders say the region must strengthen its competitiveness, rather than expect US political changes to solve its problems.
Trump’s next steps abroad remain uncertain, and Germany’s chancellor, Friedrich Merz, will have to deal with a US president whose domestic position has weakened but whose foreign-policy authority remains significant.
Germany could face economic risks if Donald Trump responds to weakened domestic power by pushing harder on foreign policy, according to economists cited by Bild.
Possible new US attacks on Iran or higher tariffs could increase uncertainty for German companies and risk further industrial job losses.
An escalation in the Gulf could raise oil and gas prices, adding to inflation and potentially making European Central Bank rate cuts harder.
Economists also pointed to structural pressures on Germany, including competition from China, high energy costs and disadvantages as a place to do business.
Bild reported that the US midterm election result had weakened Trump politically, while the relationship between him and German Chancellor Friedrich Merz had recently cooled.
- Who
- US President Donald Trump and Germany, including its businesses and workers, are at the centre of the story.
- What
- Trump’s weakened domestic position could lead him to pursue a more forceful foreign policy, with possible economic effects for Germany.
- When
- The reports were published on November 4, 2026, after the US midterm elections.
- Where
- The potential economic effects concern Germany; possible sources of escalation include the Middle East and trade disputes.
- Why
- Economists cited by Bild warned that new conflict or tariffs could increase uncertainty, energy costs and inflation, while affecting jobs and interest rates.
This story does not have two clearly opposing sides.
German Chancellor Friedrich Merz and US President Donald Trump met in the Oval Office in Washington, according to Bild.
Bild reported on the US midterm election result and its possible economic implications for Germany.
- Publication date
- November 4, 2026
- German chancellor
- Friedrich Merz
- US president
- Donald Trump
- Unemployed people in Germany
- Nearly 3 million
- Current oil price cited by Bild
- $96 per barrel
- Oil price forecast if the conflict is calmed
- Below $80 per barrel next year
4 sources
What people are saying
the wounded lion can become even more dangerous
Trump could order new attacks on Iran or impose additional tariffs. That would also increase the risks for Germany.
For the German economy, the message is: It will not get worse, but it will not suddenly get better either.
structurally, little would change, but one could expect a small positive economic boost