Democrats win Congress, challenge Trump’s foreign policy

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

Democrats will have a majority in the Senate, with the Associated Press predicting they will flip Republican seats in Iowa, Kansas, North Carolina, Ohio, South Carolina and Texas.

Democrats also took control of the House, giving the party greater latitude to scrutinize the administration, direct spending and challenge Trump’s foreign policy agenda.

“We’re going to see a president who is somewhat constrained when it comes to surveillance and investigation, but when it comes to foreign policy, he still retains a lot of latitude,” Laurel Rapp, Chatham House’s U.S. and North America program director, told CNBC’s “Squawk Box Europe.”

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

“Republicans don’t really have a way out at this point. We know Democrats will seek votes in the House and Senate to constrain Republicans and constrain the administration on war powers against Iran. But whether that will bind the administration is another matter,” Rapp added.

She said Democrats could exercise the “power of the purse” to limit U.S. military spending and other Iran-related costs.

If they control both chambers, Democrats could pass legislation to order Trump to end U.S. involvement in the conflict. However, to make such a measure binding over a presidential veto would require enough votes in Congress to override it.

In a note released Wednesday, Berenberg chief economist Holger Schmieding predicted a final round of bombing in Iran, and Trump would eventually strike a deal to reopen the Strait of Hormuz by 2027, as voters feel the impact of high fuel prices and costs.

JC Lintzenich, a visiting senior fellow at the German Marshall Fund, said the president was not a “lame duck.”

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

“The president of the United States still has a lot of power, a lot of authority. We still have action to take in Iran. We still have an unresolved situation with Russia and Ukraine.”

He added that even though Congress has changed, foreign policy is still carried out by the president and his appointed officials.

“What we will see now is a little more control from Congress, the use of funding, for example in Ukraine, as required by statutes and laws,” 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 of legislation, spending and oversight to hold the White House more closely to existing laws and the demands of Congress.

There could be “more problems to come” if Trump loses control of the Senate, Berenberg’s Schmieding warned.

“As a permanent attention seeker without a coherent long-term strategy, he might be even more eager to pursue dangerous geopolitical adventures,” Schmieding said.

“Congress probably won’t give him money for a costly campaign similar to the Iran war…We will probably have to prepare for some significant foreign policy noise in the last two years of the Trump presidency,” he added.

Schmeiding said war between Russia and Ukraine would be the “extreme risk” because Trump would likely try to pressure “Ukraine into de facto submission to Russian demands” – but that’s an unlikely outcome because the president has lost his own party’s support on the issue, he added.

Trump’s influence over Republicans is expected to diminish after the midterm defeat, especially since most Republicans, including Secretary of State Marco Rubio, do not share his sympathy for Putin, according to Schmeiding.

“This may help contain the risk that Trump will attempt to impose an unacceptable deal on Ukraine. So we view this as an tail risk rather than a likely outcome.”