Rising oil prices are eroding the political advantages gained from the Trump tax cuts, increasing Republican anxieties about the upcoming midterm elections. This week, Trump is scheduled to campaign in Nevada and Arizona in an effort to boost Republican morale and promote his tax and immigration policies. However, the conflict in the Middle East has driven up oil prices, and this, combined with broad increases in the cost of food, housing, and insurance, is unsettling the foundation of the U.S. economy. These factors are also diminishing Trump's effectiveness in rallying support for Republican candidates. Five Republican strategists indicated that the White House has lost its advantage on the issue of cost of living. The political benefits from the tax cuts and perceived economic resilience are being gradually offset. Trump's approval rating fell to 36% in a late March Reuters/Ipsos poll, the lowest point of his second term. Simultaneously, according to an assessment by the non-partisan election forecaster Cook Political Report, Democrats are now the clear favorites to regain a majority in the House of Representatives. Key Senate races in North Carolina, Georgia, Ohio, and even the conservative stronghold of Nebraska are also increasingly leaning toward Democratic candidates. The benefits of the tax cuts are being undermined by high oil prices, causing concern among Republican strategists. A central part of Trump's agenda during his trip is to host a roundtable in Las Vegas focused on a "tip tax exemption" policy, aiming to demonstrate the practical benefits of his proposed 2025 tax laws to workers in the restaurant, hotel, and casino industries. Under this proposal, eligible workers could exclude up to $25,000 in tip income from federal taxes, though payroll taxes would still apply, and the benefit would phase out for higher earners. A White House spokesperson stated on Wednesday that during this tax filing season, over 53 million taxpayers have already benefited from at least one provision of Trump's signature tax cuts, with the average refund exceeding $3,400. Nevertheless, several Republican strategists remain pessimistic. A political science professor from the University of Nevada, Las Vegas, commented, "The cost of living will overwhelm everything—and that's not a pun—including any modest improvements in tax refunds." A Republican strategist involved in congressional election consulting stated bluntly that the political impact of the tax cuts has "already been neutralized." High oil prices represent a core political vulnerability for Republicans. Brent crude oil has surpassed $96 per barrel, with ongoing tensions in the Strait of Hormuz disrupting global oil supplies. Even if the conflict ends, global oil producers could take weeks to restore full production, meaning higher fuel costs will continue to feed into the prices of various goods and services, creating persistent inflationary pressure. The White House has limited options left to lower energy prices. Sources familiar with internal discussions revealed that the administration has already utilized the Strategic Petroleum Reserve, adjusted shipping regulations, and eased sanctions on Russian and Iranian oil, yet prices remain high. "The remaining options are all bad, and we have advised the White House against taking them," said an oil industry executive involved in the discussions. Trump's statements on oil prices have been inconsistent; he has at times suggested Americans might need to endure high prices for an extended period, while at other times predicted a sharp decline once the war concludes. A White House spokesperson asserted that Trump has always been candid about the short-term economic impacts of the Iran conflict and emphasized that the administration remains focused on its domestic cost-of-living agenda. In response to the challenging election outlook, the White House is ramping up its midterm election support. Trump announced last week that he is deploying senior advisor James Blair to assist various midterm campaigns, a move widely interpreted as a sign of deepening concern within the administration about the party's prospects. Both Nevada and Arizona feature highly competitive races for Senate and House seats. On Friday, Trump is also scheduled to appear at an event in Phoenix hosted by the conservative group Turning Point USA. Concurrently, Trump's recent public dispute with the Pope and criticism over his social media posts featuring religious imagery have somewhat diverted attention from his economic message. Trump himself has attempted to downplay concerns about potential midterm losses. "Even if you have a great president, they often lose in the midterms," he said in a Wednesday interview with Fox, "So we're going to work hard to turn that around."
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