Publications: Notes at the Margin

Trump, Tweets, Trade: Impact of a Trade War on Oil and Oil Prices (July 9, 2018)


The global economy is being attacked by a combination of tweets and tariffs. Much of the tweeting cacophony is a placebo for key voters in the states that made Donald Trump president despite his loss of the popular count by three million votes.


The actions on trade, though, are real. The trade war with China, for example, could have a serious economic impact, one that may spill over to oil. One good study done two years ago suggests that a hypothetical trade war could cut US GDP growth as much as two percentage points in the first and second years of the battle. Global oil consumption could be reduced two to three million barrels per day from projected levels were other countries affected as well. To echo a warning screamed at a sailor responding slowly to the December 7, 1941 attack on Pearl Harbor: "Son, this is no drill!"


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