Scott Knuth was dwarfed by the 16ft x 10ft flag that he waved to and fro on a street corner in Arlington, Virginia. “Trump won,” it falsely proclaimed, “Save America.”

But Donald Trump was not coming to town. Instead his successor, Joe Biden, was about to take the stage in a campaign rally at a dangerous inflection point in his young presidency.

Biden was speaking on behalf of Democrat Terry McAuliffe who this Tuesday takes on Republican Glenn Youngkin to become governor of Virginia. But he was keenly aware that the race will represent the first referendum on his White House tenure and a potential preview of next year’s crucial midterm elections for Congress.

The Virginia contest also takes place against the backdrop of Biden’s ambitious, would-be historic legislative agenda stalling in Washington as his Democratic party goes to bitter war with itself over a huge social and environmental spending bill.

The president reportedly told Democratic members of Congress on Thursday: “I don’t think it’s hyperbole to say that the House and Senate majorities and my presidency will be determined by what happens in the next week.”

With his approval rating sagging after a coronavirus surge and chaotic retreat from Afghanistan, Biden is badly in need of a win or two. Failure in Virginia, where no Democrat has lost a statewide election for 12 years, and continued paralysis on Capitol Hill would represent a crushing double blow.

Protesting outside last Tuesday’s McAuliffe rally in Arlington, Trump supporters were eager for signs of weakness and confident of a Republican fightback.

Carrie Johnson, 45, a merchandiser clutching a Stars and Stripes flag, said: “The Biden presidency has been an absolute dumpster fire. Our borders are wide open. Inflation is running wild. He’s trying to strip us of our freedoms. His approval rating is falling by the day.”

About 2,500 people attended the rally, according to the White House, far fewer than a typical Trump event. Supporters of McAuliffe, 64, were aware that the closely and bitterly contested race has national implications.

Lisa Soronen, 46, a lawyer who brought with her eight-year-old daughter Sasha despite the evening chill, said: “If McAuliffe loses, it will be seen as a victory for Donald Trump, whether it is or not. A lot can happen between now and the midterms but this is seen as the bellwether.”

Evidently aware of this, Biden used an 18-minute speech to directly compare his record against that of his predecessor on coronavirus vaccinations, the stock market and jobs growth. Then he sought to tie Trump to Youngkin, a 54-year-old businessman and political neophyte.

“Terry’s opponent has made all of his private pledges of loyalty to Donald Trump,” Biden told the crowd. “But what’s really interesting to me: he won’t stand next to Donald Trump now that the campaign is on. Think about it. He won’t allow Donald Trump to campaign for him in this state. And he’s willing to pledge his loyalty to Trump in private, why not in public? What’s he trying to hide? Is there a problem with Trump being here? Is he embarrassed?”

Indeed, if the McAuliffe campaign has one message in this race, it is that Youngkin, for all his his fleece jacket suburban dad demeanor, is a mini-Trump and therefore anathema to the most liberal state in the south. In one of the Democrat’s ads, Trump is heard endorsing the candidate, then Youngkin says Trump “represents so much of why I’m running”; no further comment is required.

Republicans insist the effort is doomed. Patti Hidalgo Menders, president of the Loudoun County Republican Women’s Club in Ashburn, said: “Donald Trump is no longer in office. I think that’s a lost cause for McAuliffe.”

For his part, Youngkin has relentlessly pushed a culture wars message that Virginia’s schools are under existential threat from “critical race theory”. The fact that critical race theory – an analytic framework through which academics discern the ways that racial disparities are reproduced by the law – is not taught in Virginia does not seem to matter to him.

One Youngkin ad features a mother who once sought to ban Beloved, a classic novel by the African American author Toni Morrison, from classrooms. Her effort led to state legislation that would have let parents opt out of their children studying classroom materials with sexually explicit content; it was vetoed by McAuliffe when he was governor. Democrats seized on the issue to accuse Youngkin of trying to ban books and “silence” Black authors.

What these very different campaign pitches have in common is a laser focus on the suburbs, where Trump fared poorly against Biden in last year’s presidential election but where parental anxiety over school curriculums and virus precautions is seen as ripe for exploitation. Both parties are monitoring closely which message will prevail as they prepare to campaign for the November 2022 midterms.

The Virginia election may well be won and lost in the suburbs of the state capital, Richmond, once the seat of the slave-owning Confederacy where a statue of Gen Robert E Lee was last month removed after 131 years. Yard signs for both McAuliffe and Youngkin are visible in the suburb of Short Pump, which has a lively shopping mall, well-regarded restaurants and excellent government schools.

Resident Beth O’Hara, 46, a lawyer, said: “I think the suburbs are really going to make the difference and there are people I know who really distrusted Trump and did not vote for his re-election but are planning to vote for Youngkin. That tells me people view him in a much more moderate way.”

But O’Hara will vote for McAuliffe. “It’s difficult for me to imagine, after some progress over the last couple of years in Virginia, going back to a place where we have a Republican governor who has at least suggested further restrictions of abortion. I’m kind of done seeing us backslide on that particular issue.”

Seventy miles away is Charlottesville, where a white supremacist march in 2017 galvanised Biden to run for president in what he called a battle for the soul of the nation. Now Charlottesville will render its own verdict: McAuliffe has acknowledged that Biden’s dip in the polls, and Democrats’ inertia in Washington, could hurt his campaign.

Larry Sabato, director of the Center for Politics at the University of Virginia in Charlottesville, said: “This is going to be a test case that Republicans will use in 2022, whether Youngkin wins or not, because it’s clearly going to be close. The fact that he could turn a +10 Biden state, with Biden’s help and the congressional Democrats’ help, into a close contest tells you that some of the social and cultural issues, however outrageous they are, are working.”

Sabato added: “Critical race theory doesn’t even exist in this state. We don’t teach it. I just can’t tell you how many people come up to me, in stores and gas stations and so on, and say, ‘Why are we teaching this race thing?’ I tell them it’s not taught. They say, ‘Well, that can’t be because I heard Mr Youngkin talk about it.’ He talks about it every day about 10 times. You can create an issue out of nothing.”

Democratic voters in Charlottesville are appalled by Youngkin’s reversion to dog-whistle politics in a state that has been trending Democratic in recent years with strict gun laws, loose abortion restrictions, protections for LGBTQ+ people, the abolition of the death penalty and the legalisation of marijuana for adult recreational use.

Andrea Douglas, executive director of the Jefferson School African American Heritage Center, said: “If Virginia becomes a Republican state, all of the work that we have done over the course of the last few years in Charlottesville and just generally trying to move Virginia towards being a progressive state, all of that will be turned back.

“Seeing the kind of work that has been done in the state to re-engage our students with African American history in the face of critical race theory backlash, the last thing we need is a Republican governor. From the perspective of not just being a person of color, but being a woman of color, he is a dangerous, dangerous person. His positions on abortion, his positions on education.”

Youngkin has been walking a political tightrope, seeking to play down his links to Trump in Democratic-held cities while embracing the former president in his old strongholds in the hope of reactivating his base of support.

Meanwhile, McAuliffe has rallied with Vice-President Kamala Harris and former president Barack Obama in an attempt to whip up enthusiasm in an election-weary electorate. One of the biggest challenges facing Democrats is apathy from young voters, and voters of color, disenchanted by Biden’s failure to deliver on promises on the climate crisis, immigration reform, racial justice in policing and voting rights.

There is also frustration over his stalled legislative agenda. This week Biden announced a pared down social and environmental spending package worth $1.75tn, which was half his original proposal and dropped paid family leave, lower prescription drug prices and free community college.

As.the president flew off to Europe for Cop26 and meetings with Boris Johnson and other world leaders, it remained unclear whether progressives in the House, or the conservative Democratic senators Joe Manchin and Kyrsten Sinema, would explicitly back the new framework.

This could leave Biden in a damaging limbo, with Republicans likely to claim a moral victory even if they narrowly lose Virginia, paving the way for success in the midterms and then for another Trump presidential run in 2024.

Democrat Juli Briskman, a district supervisor in Loudon county who is campaigning for McAuliffe, said: “If we don’t win, unfortunately, that will give the right their playbook because they have been trying hard to confuse parents and confuse voters with false narratives over our school system and false narratives over our voting system. If those false narratives succeed then that gives them a playbook for the ’22 and ’24 elections.”

She warned: “We are the testing ground, we are the proving ground, and we just simply have to hold the line.”