Tax cuts cannot offset the impact of the price of oil which has doubled since January 2016 - that’s not only a tax increase in the form of higher gasoline prices for consumers but impacts GDP of economies of China, India that rely on oil to produce stuff for US corporations.
2. China is world's biggest importer of oil and is battling a broader moderation in its economy amid a trade war with US. Every $10-per-barrel fall in oil prices boosts incomes by about 0.5 to 0.7% of GDP in major emerging market oil importers like China, India which helps US.
3. When people in China and India have more disposable income due to lower oil prices, they’ll buy more cars and iPhones and stuff that major US and European brands produce, driving up corporate profits and business investment. So the price of oil is key.
4. Oil prices doubled since 2016 in part due to US sanctions on Iran, a major supplier to China, India. Saudi Arabia stepped in to fill the gap but removing Iranian oil from market drove up prices–good for Saudi Arabia, not so for China, India, US, Europe.
5. Overlooked factor: Iran’s economy grew at 13% in 2016. Growth fell to 3% in 2017 amid fears of new sanctions by Trump admin and shrank to -1.9% in 2018 (-4.5% est 2019). This hurt Iran’s major trading partners: China, India, Germany, South Korea, in turn impacting US growth.
6. So keeping Iran’s economy humming and its oil and gas flowing will be key in returning to lower oil prices (and increasing US jobs growth rate) which in turn could make China agree to a trade deal with US; a new nuclear deal is thus central to all this.
7. As long as China is being squeezed by higher oil prices and has tariffs and sanctions slapped on top for its Iran relations, it is unlikely to agree to a trade deal with the US, which isn’t a great situation for either country or for the global economy. https://www.politico.com/story/2019/07/11/us-china-sanctions-iran-oil-1585902 …
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