According to Moritz Schularick, President of the Kiel Institute for World Economy, the strong showing of Democrats in the recent US midterms could potentially impact energy prices. Schularick stated to “Redaktionsnetzwerk Deutschland” that this development suggests the Trump administration will face increased pressure from within its own party to restore gasoline prices to normal levels, potentially through a resolution concerning the conflict in Iran.
He added that the outcome is also favorable for Ukraine, as it makes it more difficult for Trump to disregard congressional mandates. To the economist, the greatest beneficiaries of the midterms are the American democracy and the principle of the rule of law, noting that the functioning of these control mechanisms is economically positive.
However, Schularick cautioned against overly high expectations. While Donald Trump’s freedom to act in trade policy and regarding China policy may be slightly restricted, he believes a radical turnaround is unlikely. Despite these limitations, he maintains that Trump continues to retain significant influence in foreign policy.
