[News Terms] Republican Sweep 'Red Sweep'

White House-Senate Followed by House Control 'Within Reach'
Republican Sweep - Similar Terms Like Trifecta Exist
Red Sweep, Impact on Political and Economic Landscape?
Tax Cuts and Tariff Expansion: Trump Economic Policy Outlook Upward

In the U.S. presidential and Senate elections held on the 5th (local time), former President Donald Trump and the Republican Party secured victories, and there are expectations that the Republicans will also maintain their majority status in the House of Representatives. This so-called 'Red sweep' or 'Republican sweep,' where the Republican Party sweeps both the executive and legislative branches, is anticipated to influence the political and economic landscape.

The term 'Red sweep' refers to the Republican Party's symbolic color 'red' combined with 'sweep,' indicating a landslide victory for the Republicans in the elections. It is also called a 'trifecta' (three consecutive wins), meaning the Republican Party has won the White House, the Senate, and the House of Representatives.

President-elect of the United States Donald Trump Photo by Reuters Yonhap News

According to the Associated Press, as of the morning of the 13th, with counting still underway in the House elections, the Republicans have secured 214 seats, and the Democrats 205 seats. With the majority threshold at 218 seats, the Republicans need 4 more seats, and the Democrats 13 more seats to claim majority status. There are 16 districts, including California, where counting is still in progress.

U.S. media outlets predict that following Trump's election and the Republicans' recapture of the Senate, the Republicans will also maintain majority control of the House. The Washington Post (WP) stated, "Just days after the Republicans took control of the White House and the Senate, they are on the verge of regaining majority status in the House for the 119th Congress, thereby fully controlling Washington," and added, "If the Republican trifecta is realized, President-elect Trump's firm conservative agenda could exert significant influence."

With the Republicans expected to achieve such a landslide victory, there is growing market optimism that the Trump administration's second term will be able to implement economic policies as desired. It is anticipated that economic policies requiring approval from both the House and Senate, such as tariffs and tax cuts, will be easier to enact.

In particular, there are expectations that the tax package implemented during Trump's first administration in December 2017, which is set to expire next year, will be extended. This tax package temporarily lowered income tax rates until 2025 and reduced the corporate tax rate to 21%. President-elect Trump has pledged to make these tax cuts permanent. Additionally, it is expected that Trump's economic policy stance, including tariffs and job-related legislation extensions, will gain momentum and be more actively introduced and applied.

U.S. Congress AP Yonhap News

Reuters Yonhap News

However, some analysts note that even within the Republican Party, which controlled the House for the past two years, divisions have made passing conservative legislation difficult. Therefore, legislative-executive cooperation may not proceed as smoothly as expected. In such cases, foreign media predict that President-elect Trump will exert strong pressure.

As the possibility of a Red sweep becomes more likely, the market has already heated up. There is strong anticipation of accelerated growth and weakened regulations. Wall Street forecasts that a Republican sweep will be a short-term boon but a long-term bane for the U.S. economy. While the corporate tax cuts emphasized by President-elect Trump are expected to improve economic growth next year, the worsening trade war may make it difficult to sustain growth.

Amid expectations that Trump’s economic policies will support a strong dollar, the U.S. dollar has continued to show a clear strength against major currencies. The cryptocurrency market, including Bitcoin, has reached record highs and continues an unprecedented surge. There are even predictions that Bitcoin’s price, currently around $80,000, could rise to $125,000 by President-elect Trump’s inauguration in February next year.