Trump Pledges Tax Cuts to Slash Rising Gas Prices—Will It Work?

Trump Pushes Tax Cuts to Combat Rising U.S. Gas Prices

President Donald Trump has announced plans to collaborate with Republican lawmakers in Congress to implement substantial tax cuts for domestic oil and gas producers. His goal is to increase production and reduce the rising cost of gas at the pump. Additionally, he aims to allow businesses to fully expense investments in new factory construction and other capital expenditures. The White House / Wikimedia

Economic and Political Context

Gas prices in the U.S. have been on the rise, driven by refinery maintenance, global oil price increases, and the administration’s sanctions on major producers like Iran. The national average for a gallon of gas reached $3.165, with California seeing prices as high as $4.849 per gallon, according to AAA.

Trump, who campaigned on reducing the cost of living for American households, sees tackling gas prices as a key priority amid declining approval ratings. According to FiveThirtyEight, his approval dropped from 49.7% to 48.7% between late January and mid-February. Engin_Akyurt / Pixabay

Trump’s Proposal and Industry Reactions

Speaking at a Saudi Arabian sovereign wealth fund conference in Miami on Wednesday, Trump stated: “As long as you invest in America, build in America, and hire in America, that means that I’m fighting for you.”

While he did not provide specifics, Trump said these tax cuts would be part of the “largest tax cuts” in U.S. history. His broader tax policy also includes eliminating taxes on tips, Social Security, and overtime wages. The White House / Wikimedia

Experts Weigh Impact of U.S. Oil Expansion on Gas Prices

Energy experts remain cautious. Karl Brauer, an executive analyst at iSeeCars.com, explained to Newsweek: “If the production of oil in the U.S. increases from more drilling and fewer restrictions, it will almost certainly mean a reduction in the cost of oil because the growing supply side of market forces will push prices down.”

However, some U.S. oil drillers remain hesitant, citing global price instability as a deterrent to ramping up production. Additionally, limited refining capacity could keep gas prices high despite increased crude supply. Ratfink1973 / Pixabay

Impact of Global Sanctions and Market Forces

Trump’s recent 25% tariff on Canadian oil imports and a 10% tax on imported natural gas and oil could offset domestic tax cuts by increasing overall production costs.

Patrick De Haan, head of petroleum analysis at GasBuddy, wrote in a post on X that the national average for gasoline has reached $3.164 per gallon, marking its highest level since mid-October. He warned that prices are expected to climb further, predicting an increase of “another 15-55 cents over the next 8 weeks.” josemiguels / Pixabay

Trump’s Oil Reserve Strategy Faces Industry Doubts

Despite Trump’s push to bolster the Strategic Petroleum Reserve, some industry insiders question whether his approach will be enough to counter market volatility. As De Haan noted in another post on X: “While there may be a desire for more refineries, good luck convincing a refiner that their heyday is still coming… and to invest billions in building new capacity.”

With global demand, refining constraints, and tariffs at play, the effectiveness of Trump’s tax cuts in lowering gas prices remains uncertain. The White House / Wikimedia