'Democrats may win midterm': Ruchir Sharma warns anti-incumbency may hit Trump

Economist and investor Ruchir Sharma has said that anti-incumbency trends in the United States could favour Democrats in the next round of elections, cautioning that Donald Trump may face the same wave of voter dissatisfaction sweeping the West.

"So people asked me, ‘What will happen in the next election? The midterm elections are coming and stuff.’ I have no predictive power, but I can simply say that if I just follow the pattern, I think the Democrats have a good chance of winning. Not because of any other reason," Sharma told Zerodha's Nikhil Kamath.

He described a historic shift in US politics. "This is the first time in America’s history, at least the last 200 years that I know of, that the incumbent party in the White House lost three times in a row. That's not happened before in America, in fact, for 200 years or so."

Sharma said voter frustration with establishment figures explains both Trump's rise and the ascent of Zohran Mamdani in New York. "The politics appears very different. But the main root of the rise of both is an anti-incumbency feeling that we just want to sort of, go with someone who's anti-establishment. And Mamdani was able to capture that vote very well. Because in the primaries that he was standing were all these establishment figures, Andrew Cuomo, and people are, like, fed up with establishment figures."

At the same time, Sharma warned that Trump himself may no longer be able to claim the outsider mantle. "He could be perceived establishment four years-whatever, three years from now," he said, suggesting the Republican leader could lose ground if voter anger swings against him.

Sharma added that anti-incumbency was no longer just an American phenomenon. "This is true across the West as well. Look at the UK, look at France, look at Germany. Now, approval ratings everywhere are very low. People are like, 'Just throw the bums out.’ People are dissatisfied in terms of what’s going on. And I don’t see that same level of anger and resentment in emerging markets."

The economist's comments come at a time when Trump has imposed sweeping tariffs on Indian goods, straining Washington's ties with New Delhi, and as approval ratings for Western leaders sink across Europe.

The next US mid-term election is due in November 2026, as midterms are held every four years, halfway through a president's four-year term. These elections are crucial because all 435 seats in the House of Representatives and about one-third of the Senate seats come up for vote, determining which party controls Congress and thus the direction of national legislation and oversight. 

The outcome can significantly impact Trump's ability to pass key policies. The midterms decide the balance of power in Washington and set the tone for the second half of the president's term and the next general election.

Currently, the Republican Party holds a majority in both chambers. In the House of Representatives, Republicans have about 219 seats, maintaining a slim majority over the Democrats, who have around 212 seats. In the Senate, Republicans hold a majority with 53 seats compared to the Democrats' 45 seats.