The Democrats won control of both houses of the US Congress on 3 November. They now lead the House by about 254 seats to 162, with some races still being counted. In the Senate, they have 54 seats while the Republicans’ have 44. President Trump will now have to work with a Congress run by the other party for his last two years in office. Some results are still coming in, and the full effects may take months to show.
The “Blue Tsunami”
Democrats won seats across the country, including in places that usually vote Republican. They took more than 40 house seats from Republicans. More than 30 sitting Republicans lost their seats. This is likely the party’s biggest House majority since 2008. Republican efforts to redraw voting maps in their favour did not seem to help much. Democrats needed four more Senate seats to seize control and so far, they’ve won at least seven. However, Democrats still do not have enough votes to override a presidential veto.
Surveys of voters leaving polling stations showed widespread unhappiness. Trump’s approval rating was about 38%, the lowest for any president at a midterm election. About three in four voters were unhappy with the way the country was going. The cost of living and government corruption were their biggest concerns. The war with Iran mattered less to their vote, but most voters did not support it.
Many Republicans blame the Iran war. Vice President JD Vance said the war was the main reason the party lost. Trump said this was largely true, but he would not change his decision on Iran. He also admitted that voters disliked the higher fuel prices the war caused. Other Republicans also pointed to inflation and tariffs. However though Trump has seemingly accepted the results he does not appear ready to change direction. He named Stephen Miller, who led his immigration crackdown, as his new chief of staff. Democrats in the House may soon vote on removing Defence Secretary Pete Hegseth from office. Trump has also said he could work with Democrats on some issues.
Investors seemed pleased that the result was clear. US shares rose sharply the day after the vote, with the Dow having its best post-election day since 1982. US interest rates and the dollar fell slightly. Investors expect a split government to spend less. Health care and clean energy shares also rose.
What are the Democrats likely to do?
Control of Congress gives Democrats more power, but Trump can still block their laws. House Democrats can now investigate the government and force officials to testify. The Senate will decide whether to approve Trump’s picks for top jobs. Democrats want to bring back health care support that was cut and also pass legislation which will regulate AI development and curtail the rapid expansion of data centers around the country. They also want to limit Trump’s tariffs, though Trump says he will not back down. Because the president already has broad powers over tariffs, the new Congress may struggle to change them. The new Congress will take office in January.
The biggest open question is whether the US will attack Iran again. Israel’s leader, Benjamin Netanyahu, has urged Trump to strike after the elections. Trump says he has no immediate plans to do so and is not looking to escalate. Israel’s own politics have also changed. Netanyahu’s side lost its majority in October’s election, and his rival Gadi Eisenkot has been asked to try to form a government.
What does this mean for Sri Lanka?
Oil prices fell after the vote, which helps Sri Lanka. Brent crude dropped about 9% the next day, as traders hoped the Iran war would end. Sri Lanka’s fuel import bill rose by more than half in the first nine months of 2026. This helped push up the trade deficit. Lower oil prices would ease this pressure. New attacks on Iran could quickly push prices back up.
The election does not change the US tariff on Sri Lankan goods. Most Sri Lankan exports to the US face an extra 10% tariff, set by Trump’s trade office, not by Congress. The US buys more than a fifth of Sri Lanka’s goods exports. Democrats seem to be focused predominantly on tariffs against close partners such as Canada, so Sri Lanka may not be high on their list.
Lower US interest rates can make countries like Sri Lanka more attractive to investors, particularly after our recent credit rating upgrade. US rates eased after the vote. Foreign investors bought heavily into Indian shares in the first week of November, partly because of the election and cheaper oil. Whether that money also reaches Sri Lanka will likely depend on oil prices staying low.