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Oil Is At The Center Of The 2020 Elections

Trump

Donald Trump faces an interesting set of economic and geopolitical circumstances heading into the 2020 election. The President would obviously like the US to be in strong economic shape with robust GDP growth, low unemployment and low interest rates in November of next year. But he also would like to be ‘tough’ on China and Iran. Unfortunately, being tough on Iran comes at the cost of driving gasoline prices higher – something Mr. Trump hates- and being tough on China comes at the cost of lower GDP growth. But there is one potential short-term fix to this pair of issues which Trump can use to help provide an economic salve to voters via cheap gasoline and even gain apply as a bargaining chip with Beijing; let China buy a little more Iranian crude.

When it comes to politics and gasoline prices, the relationship is murky. It’s impossible to prove that high gas prices lead to lost elections, but we intuitively accept that voters don’t like their wallets to be squeezed at the pump. In somewhat recent US history, climbing fuel prices helped weaken consumers in the early 2000s before the tech crash and again 2006 and 2007 leading up to the housing market crash. Trump obviously wants American voters to feel financially confident on their way to the voting booth and cheap gasoline is an important part of this recipe.

Fortunately for Trump, he has an extremely valuable insurance policy against higher gasoline prices in his ability to let China…




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