Iran dictates terms, US economy weakens: Trump finds himself in a trap ahead of the congressional elections
The war with Iran, the crisis surrounding the Strait of Hormuz and deteriorating economic indicators could weaken the positions of US President Donald Trump and the Republican Party ahead of the mid-term congressional elections.
This is reported in a CNN analysis. The outlet believes that Trump finds himself in the most vulnerable position in relations with Iran among US presidents since Jimmy Carter.
In 1979-1980, Tehran held 52 American hostages for 444 days, creating political pressure on the Carter administration. Now the Strait of Hormuz has become the leverage, on whose operation global oil supplies and fuel prices in the US depend.
As early as the beginning of August, Trump’s team expected a quick agreement on restoring shipping. However, Iran has put forward new demands: to end the American naval blockade, withdraw US troops from the region, lift sanctions, unfreeze Iranian assets and pay compensation for the losses sustained during the war.
Accepting such conditions would be politically difficult for Trump. At the same time, resumption of large-scale hostilities could increase Americans' negative attitude towards the war and cause another rise in energy prices.
Trump has so far decided not to exacerbate the situation, counting on the naval blockade and sanctions to worsen Iran's economic predicament and force Tehran to make concessions. The President stated that the US is reducing the intensity of the confrontation and negotiating only partially.
However, CNN notes that the Iranian leadership may be prepared to withstand economic pressure for longer than Trump's political calendar allows. The mid-term elections in the US are already scheduled for November.
Gasoline prices exceed $4
The consequences of the war are already being felt by American consumers. According to the American Automobile Association, as of August 9, the average price per gallon of gasoline in the US was about $4.01.
Fuel costs almost a dollar more than a year ago. One of the reasons was the rise in oil prices due to instability around the Strait of Hormuz and risks to energy supplies from the Persian Gulf.
The Trump administration has repeatedly stated that prices will drop quickly after the strait's reopening. However, such statements can further strengthen Iran's negotiating position, demonstrating the White House's dependence on the swift restoration of oil shipments.
The labor market is also deteriorating
Another problem for the Republicans is the weak US labor market data. In July, the number of non-farm jobs decreased by 23,000, while the average monthly growth over the previous 12 months had been 34,000.
Employment in local government education fell by 50,000 jobs, and in retail trade by 19,000. The unemployment rate in July stood at 4.1%.
The White House insists the US economy remains strong, and the decline in employment is partly explained by the completion of temporary jobs and seasonal factors. However, high spending on housing, food, medical services and fuel continues to influence voters' assessment of the economy.
According to CNN's assessment, the Republicans have already lost their traditional edge over the Democrats on voters' perception of economic and national security issues. The combination of a prolonged war, expensive fuel and a weak labor market could become one of the main risks for Trump's party in the November elections.
Based on: CNN, US Bureau of Labor Statistics
