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What are the odds of an upset in Texas or Florida?

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“I’VE BEEN saying this for months now and a lot of people haven’t listened, but now they are: the stars are aligning in both Texas and Florida,” says Jaime Harrison, the chair of the Democratic National Committee. Aboard a swanky campaign bus in Jacksonville, Florida’s largest city, Mr Harrison’s tone shifts to distress as he explains that his party needs “multiple pathways to get the Senate majority”. In the final weeks of the campaign the map has become more daunting for Democrats. To their dismay, holding the upper chamber may now depend on flipping seats in America’s two biggest Republican-controlled states, where Donald Trump is expected to win comfortably.

New polls have Democrats like Mr Harrison feeling optimistic. Last week one in Texas showed Colin Allred, a linebacker-turned-congressman, in a dead heat with Ted Cruz, the Republican incumbent. In Florida Debbie Mucarsel-Powell, an Ecuadorean immigrant and one-term congresswoman, is trailing behind Rick Scott by as few as two or three points in her best polls. But The Economist’s forecast model, which accounts for other factors like candidate experience and the state’s voting history, shows a less rosy picture. By our reckoning, in each race Democrats have only a one-in-five chance of victory.

The Democratic Party is nonetheless hanging its hopes on these two races in part because the Republican incumbents are both deeply disliked. Mr Cruz, who has represented Texas since 2013, is a hardliner known for picking fights and not being a team player. “If you killed Ted Cruz on the floor of the Senate, and the trial was in the Senate, nobody would convict you,” Lindsey Graham, his colleague from South Carolina, teased in 2016. In 2021 Mr Cruz’s approval rating in Texas dropped when he jetted off to Cancún as his constituents suffered through a winter storm that left millions without power. On policy, his indelible support for Texas’s near-total abortion ban, one of America’s harshest, has done nothing to endear him to the plurality of Texans who support fewer restrictions.

Unpopularity contests

Mr Scott, in Florida, may be the rare politician with even fewer friends than Mr Cruz. He entered politics after the hospital chain he founded and ran had to pay out in America’s biggest Medicare fraud. After serving two terms as governor he won a Senate race in 2018 and was put in charge of the party’s campaign arm for the 2022 midterms. He presented a hard-right plan to remake the Republican Party, which included a proposal to sunset entitlement programmes that went over as poorly nationally as it did in Florida, a state where one in five residents is a pensioner. When Republicans did badly, they blamed him.

Mr Scott responded by challenging Mitch McConnell for the job of Senate majority leader. “Now I’m seeking to become the least popular man in Washington and I’m happy to report I’m making great progress,” he quipped in a speech at the Conservative Political Action Conference last year. At home his inability to curb Florida’s property-insurance crisis throughout his political career has left many locals reeling as hurricanes batter the coast and bankrupt families.

Democrats wanted both Republicans to have to confront these liabilities. Yet it was not until late September that the Democratic Senatorial Campaign Committee, responsible for getting Democrats elected, went on the offensive in Texas and Florida with a pair of multimillion-dollar ad-buys. Ms Mucarsel-Powell, Mr Scott’s opponent who says her initials stand for “Don’t Mess with my People”, reckons the money was too little, too late. In other battleground states, “you’re seeing investment and of course then you see shifts,” she says, but without that kind of cashflow to help the campaign talk to voters “nothing is going to happen.” Mr Scott, who in the past has written himself big cheques when he senses his rival in striking distance, has not spent even half of what he did in 2018, when he won by less than one point. Democrats hope that Florida’s ballot initiatives to legalise marijuana and codify abortion rights will give Ms Mucarsel-Powell a last-minute boost.

Plateauing poll numbers in Florida have national Democrats turning to Texas, where there seems to be better mojo after Mr Allred faced off with Mr Cruz in a debate two weeks ago. On October 25th Kamala Harris appeared at a rally with Mr Allred in Houston. It was the first time in decades that a Democratic presidential candidate has visited the state so close to election day. But on such conservative terrain any down-ballot Democrat is bound to struggle in a presidential cycle. This year “a vote against Ted Cruz is a vote against Donald Trump,” says Jason Sabo, a Democratic lobbyist in Austin.

Those paying attention to the campaigns could be forgiven for feeling a sense of déjà vu. Democrats have perennially promised that an increasingly diverse electorate would flip both states in their favour, only to suffer repeated losses. This time around some admit that they are playing the long game. In Texas a band of Democratic leaders launched the Agave PAC to build party infrastructure and “move past the boom-and-bust cycle of excitement”. And in Florida Nikki Fried, the state’s new Democratic Party chair, talks soberly about this year’s prospects. For the first time since the state flipped Republican the party is running state legislative candidates in every district, knowing they will lose in races big and small. “We’ve got to start somewhere,” she says.

Economics

Trump will ‘buckle under pressure’ if Europe bands together over tariffs: German economy minister

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BERLIN, GERMANY – FEBRUARY 24: Robert Habeck, chancellor candidate of the German Greens Party, speaks to the media the day after German parliamentary elections on February 24, 2025 in Berlin, Germany. The Greens came in fourth place with 11.6% of the vote, down 2.9% from the previous election. (Photo by Sean Gallup/Getty Images)

Sean Gallup | Getty Images News | Getty Images

U.S. President Donald Trump will “buckle under pressure” and alter his tariff policies if Europe bands together, acting German economy minister Robert Habeck said Thursday.

“That is what I see, that Donald Trump will buckle under pressure, that he corrects his announcements under pressure, but the logical consequence is that he then also needs to feel the pressure,” he said during a press conference, according to a CNBC translation.

“And this pressure now needs to be unfolded, from Germany, from Europe in the alliance with other countries, and then we will see who is the stronger one in this arm wrestle,” Habeck said.

Elsewhere, outgoing German Chancellor Olaf Scholz said he believed the latest tariff decisions by Trump were “fundamentally wrong,” according to a CNBC translation.

The measures are an attack on the global trade order and will result in suffering for the global economy, Scholz said.

On Wednesday, Trump imposed 20% levies on the European Union, including on the bloc’s foremost economy Germany, as he signed a sweeping and aggressive “reciprocal tariff” policy.

Germany is widely regarded as one of the countries likely to be most impacted by Trump’s tariffs, given its heavy economic reliance on trade.

This is a developing story, please check back for updates.

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Economics

The Trump train slows

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THESE DAYS are dire and dour for Democrats. But April 1st brought a brief reprieve—and not because of jokes. That was the day that the most expensive judicial election in American history in the battleground state of Wisconsin ended in a decisive triumph for the left-leaning candidate. It had drawn $100m of spending, including an estimated $25m from Elon Musk who also, perhaps unhelpfully, personally campaigned in the state. The same day, two special elections in Florida for vacant congressional seats took place in safe Republican districts. Although they did not win, Democrats improved their margins by 17 and 20 percentage points compared with the general elections held just five months ago. Cory Booker, a Democratic senator from New Jersey, staged a one-man protest on the floor of the Senate, excoriating President Donald Trump’s administration for 25 hours straight—a stunt, to be sure, but one that demonstrated proof of life in a party that supporters worried had gone limp.

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Economics

How did the U.S. arrive at its tariff figures?

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U.S. President Donald Trump speaks during a “Make America Wealthy Again” trade announcement event in the Rose Garden at the White House on April 2, 2025 in Washington, DC.

Chip Somodevilla | Getty Images

Markets have turned their sights on how U.S. President Donald Trump’s administration arrived at the figures behind the sweeping tariffs on U.S. imports declared Wednesday, which sent global financial markets tumbling and sparked concerns worldwide.

Trump and the White House shared a series of charts on social media detailing the tariff rates they say other countries impose on the U.S. Those purported rates include the countries’ “Currency Manipulation and Trade Barriers.”

An adjacent column shows the new U.S. tariff rates on each country, as well as the European Union.

Chart of reciprocal tariffs.

Courtesy: Donald Trump via Truth Social

Those rates are, in most cases, roughly half of what the Trump administration claims each country has “charged” the U.S. CNBC could not independently verify the U.S. administration’s data on these duties.

It didn’t take long for market observers to try and reverse engineer the formula — to confusing results. Many, including journalist and author James Surowiecki, said the U.S. appeared to have divided the trade deficit by imports from a given country to arrive at tariff rates for individual countries.

Such methodology doesn’t necessarily align with the conventional approach to calculate tariffs and would imply the U.S. would have only looked at the trade deficit in goods and ignored trade in services.

For instance, the U.S. claims that China charges a tariff of 67%. The U.S. ran a deficit of $295.4 billion with China in 2024, while imported goods were worth $438.9 billion, according to official data. When you divide $295.4 billion by $438.9 billion, the result is 67%! The same math checks out for Vietnam.

“The formula is about trade imbalances with the U.S. rather than reciprocal tariffs in the sense of tariff level or non-tariff level distortions. This makes it very difficult for Asian, particularly the poorer Asian countries, to meet US demand to reduce tariffs in the short-term as the benchmark is buying more American goods than they export to the U.S., ” according to Trinh Nguyen, senior economist of emerging Asia at Natixis.

“Given that U.S. goods are much more expensive, and the purchasing power is lower for countries targeted with the highest levels of tariffs, such option is not optimal. Vietnam, for example, stands out in having the 4th largest trade surplus with the U.S., and has already lowered tariffs versus the U.S. ahead of tariff announcement without any reprieve,” Nguyen said.

The U.S. also appeared to have applied a 10% levy for regions where it is running a trade surplus.

"Absolutely nothing good coming out" of Trump tariff announcement, veteran economist Rosenberg says

The Office of the U.S. Trade Representative laid out its approach on its website, which appeared somewhat similar to what cyber sleuths had already figured out, barring a few differences.

The U.S.T.R. also included estimates for the elasticity of imports to import prices—in other words, how sensitive demand for foreign goods is to prices—and the passthrough of higher tariffs into higher prices of imported goods.

“While individually computing the trade deficit effects of tens of thousands of tariff, regulatory, tax and other policies in each country is complex, if not impossible, their combined effects can be proxied by computing the tariff level consistent with driving bilateral trade deficits to zero. If trade deficits are persistent because of tariff and non-tariff policies and fundamentals, then the tariff rate consistent with offsetting these policies and fundamentals is reciprocal and fair,” the website reads.

This screenshot of the U.S.T.R. webpage shows the methodology and formula that was used in greater detail:

A screenshot from the website of the Office of the United States Trade Representative.

Some analysts acknowledged that the U.S. government’s methodology could give it more wiggle room to reach an agreement.

“All I can say is that the opaqueness surrounding the tariff numbers may add some flexibility in making deals, but it could come at a cost to US credibility,” according to Rob Subbaraman, head of global macro research at Nomura.

 — CNBC’s Kevin Breuninger contributed to this piece.

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