Democrats win Congress, challenging Trump foreign policy

With Democrats taking control of both houses of Congress, U.S. President Donald Trump could intensify his focus on foreign policy in his final two years in office, while facing greater scrutiny over the wars in Iran and Ukraine, experts told CNBC.

Democrats will have a Senate majority and won control of the House, giving them greater scope to scrutinize the administration, shape spending and challenge Trump’s foreign-policy agenda.

“We are going to see a president that is somewhat constrained on matters of oversight and investigation, but on foreign policy, he does still retain a lot of latitude,” Laurel Rapp, director of Chatham House’s U.S. and North America Programme, told CNBC’s “Squawk Box Europe.”

Rapp said the Iran war was a “major issue” in this election cycle amid soaring fuel prices, food costs, and inflation. The war began when Trump launched joint strikes with Israel on Feb. 28.

“Republicans don’t really have an off-ramp here at this stage. We know the Democrats will seek to take votes in the House and the Senate to constrain the Republicans, to restrain the administration on Iran war powers. But whether that will bind the administration is another matter,” Rapp added.

Democrats could use Congress’ spending powers to try to restrict funding for the war, she added. Any bill directing Trump to end U.S. involvement would need two-thirds support in both chambers to override a presidential veto.

In a Wednesday note, Berenberg’s Chief Economist Holger Schmieding predicted a final round of bombing in Iran, with Trump ultimately striking a deal to reopen the Strait of Hormuz by 2027, as voters feel the sting from high prices and fuel costs.

J.C. Lintzenich, visiting senior fellow at the German Marshall Fund, said that the president is not a “lame duck.”

“Remember that this election changes the Congress; it does not change the president,” Lintzenich told CNBC’s “Squawk Box Europe” on Wednesday.

“The President of the United States still has lots of power, lots of authority. We still have pending action in Iran. We still have an unresolved situation with Russia and Ukraine.”

He added that while Congress has changed, foreign policy is still executed by the president and his appointed officials.

“What we’ll now see is a little bit more congressional oversight, the application of funding, for example, Ukraine, that’s required by statute and law,” Lintzenich said.

Lintzenich said the outgoing Congress was “more willing to let the White House slide,” but Democratic control of both chambers would mean a more assertive Congress, using its Article I powers over legislation, spending, and oversight to hold the White House more closely to existing law and congressional requirements.

Berenberg’s Schmieding warned that Trump could face “more trouble ahead” as Democrats take control of the Senate.

He said Congress was unlikely to fund “an expensive campaign similar to the Iran war, but added that Trump, “as a perennial attention seeker without a consistent long-term strategy,” may be “even more eager to pursue dangerous geopolitical adventures.”

Speaking as voting took place on Tuesday, Ukrainian President Volodymyr Zelenskyy said the U.S. midterm elections would “shape the future.”

“The world will be watching,” he said in Berlin. “Right now, things are deeply uncertain. Many hopes may once again end in disappointment.”

The results could complicate Trump’s ability to secure congressional backing or funding for a deal, but they do not prevent him from pressing Kyiv diplomatically. Berenberg’s Schmieding said Trump could try to push Ukraine toward a deal favorable to Russia, though he considers that a “tail risk.”

Schmieding said Trump’s influence over Republicans could weaken after the midterm defeat, noting that Republicans, including Secretary of State Marco Rubio, are warier of Putin. “That can help to contain the risk of Trump trying to impose an unacceptable deal on Ukraine,” he said.

If Trump did pressure Ukraine, Europe would likely increase its support, Schmieding said, but it could not fully replace critical U.S. military and intelligence assistance.