President Donald Trump’s chances of reelection could hinge on how widely the coronavirus spreads in the United States, according to one policy analyst, with voters assessing whether Trump is an adequate “protector in chief.”
Despite Trump’s “strong tailwinds” behind his reelection with an unemployment rate below 4%, the markets near record highs, his Gallup approval ratings at the highest levels of his presidency, and “the candidate he was most afraid to run against” Joe Biden struggling in the Democratic primary, the American public “expects there to be the ‘Protector in Chief,’” said Ed Mills, policy analyst for Raymond James, in his Wednesday briefing.
Besides national security (protecting from terrorist attacks) and economic security (job security), being a protector in chief “may include health security,” Mills said.
Trump is scheduled to hold a media briefing on the coronavirus at 6 p.m.
“If there is a widespread outbreak, Americans who otherwise may disagree with the president but will vote for him because they feel protected, may now consider a different candidate,” according to Mills.
Raymond James, Mills said, believes the coronavirus “may be the greatest current threat” to Trump’s reelection.
“The impact on the health of Americans will be a personal problem, especially with a 1% fatality rate (about 10x that of normal seasonal influenza), but the economic impact could also be significant,” Mills opined.
Andy Friedman, founder and principal of The Washington Update, added that “the virus conceivably could affect Trump’s chances for reelection if its negative consequences persist through October; For instance, if the virus continues to rage and Trump’s administration mishandles its containment.”
A “greater risk,” however, “is that the virus passes, but the consequential adverse economic effects linger,” Friedman said. “Trump’s greatest attribute is the strength of the economy. If the economy worsens and recovery is slow, some supporters might blame Trump for the downturn. More likely, though, Trump’s supporters will view the virus as out of Trump’s control, and believe that he will reconstitute the strong economy when the effects pass – just as (in their view) he produced a strong economy after he took office.”
The Trump administration made an emergency supplemental appropriations request of $2.5 billion on Monday — $1.25 billion in new emergency funds and $1.25 billion in money diverted from other federal programs — to fight the coronavirus. Senate Majority Leader Chuck Schumer, D-N.Y., deemed the request “too little and too late.” For context, Schumer said, “Congress appropriated more than $6B for the Pandemic Flu in 2006 and more than $7B for H1N1 flu in 2009.”
On Tuesday, Schumer released a detailed proposal for $8.5 billion in emergency funding to fight the spread of coronavirus in the United States.
Mills stated that if the virus hits the U.S. “in a meaningful way, all areas of the U.S. economy, from movie theaters, to restaurants, to airlines, to hotels, and more, will be impacted and growth for one or two quarters could fall notably.”
If a big outbreak hits the U.S., Democrats will try to blame Trump “and say his team has not appropriately protected Americans,” Mills said.
Trump, in turn, “will claim Democrats are playing politics at a time of national crisis and that the Obama administration didn’t do the job it should have. We are already seeing the groundwork being laid to blame other countries for this as well,” Mills said. “The bottom line is that he will try to make it clear that this is not his fault. This will likely influence the election.”
Mills noted that investors he’s spoken with “have been assuming that Trump’s chances of reelection go up if Sen. [Bernie] Sanders is the Democratic nominee and therefore concern over his positions should be muted.”
The coronavirus could change that, Mills said.
“The political bases for each party are likely to believe whatever their leadership says, but swing voters and unaffiliated voters will have to determine who to blame and if it is a big enough concern. These voters that may have been going to vote for the president because of their jobs, may be concerned that he can’t do the most basic job as president — to protect them.”
Trump’s base, Friedman added, “believes he can maintain a good economy or repair a poor one, I doubt the virus standing alone will significantly affect his chances for reelection. This view could change if the virus has some new adverse effect that we are not now contemplating.”
— Check out Coronavirus May Not Be Mere ‘Blip’ in Markets: Northern Trust on ThinkAdvisor.