Trump Weighs Federal Gas Tax Suspension Amid Midterm Fuel Price Pressure

Key points

• Trump stated the administration is 'thinking about' suspending the federal gas tax, which stands at 18.4 cents per gallon for gasoline and 24.4 cents for diesel.
• A suspension would require an act of Congress, as the president lacks unilateral authority to remove the tax, which generates over $23 billion annually for the Highway Trust Fund.
• The national average for regular gasoline reached $4.37 per gallon on Tuesday, more than a dollar higher than a year ago, according to AAA.
• Trump previously raised the idea in May when the Iran conflict began, but no legislation has been brought to a vote despite several proposals.
• South Dakota Senator Mike Rounds wrote to Trump urging a 90-day suspension, arguing that broader regulatory changes to expand refining capacity will take too long to address current price spikes.

Background

This issue follows a period of heightened fuel costs linked to the Iran conflict, which began in February 2026. While Trump has previously pushed for various tax credits, such as those for film production, the gas tax debate is distinct due to its direct impact on consumer costs and infrastructure funding. The federal tax has not been suspended since 1956, though former President Biden requested a temporary pause in 2022 during the Ukraine crisis, which was never enacted.

How outlets are covering it

The Guardian and Financial Times emphasize the political timing, noting that Trump is responding to voter anger over fuel costs four weeks before the midterms. The Financial Times highlights that Trump recently eased restrictions on dyed diesel and backed off a threat to ban diesel exports after European allies agreed to release stockpiles. In contrast, Dakota Broadcasting reports on Senator Mike Rounds' letter, which argues that the root cause is a global shortage of refining capacity rather than the Iran war. Rounds suggests that while expanding domestic refining via the Defense Production Act is the long-term solution, a temporary tax suspension is needed for immediate relief. The outlets differ on the primary driver of high prices: Trump attributes it to the ongoing war, while Rounds points to structural deficits in the fuel supply chain.

Why it matters

The potential suspension of the federal gas tax could significantly impact consumer prices and federal revenue for infrastructure. With midterm elections approaching, the issue is a key factor in voter sentiment regarding the Republican Party's economic management. If enacted, a suspension would reduce the price of regular gasoline by approximately 4%, but it would also require Congress to find alternative funding for the Highway Trust Fund, potentially through general fund transfers.

What to watch

Congress must decide whether to pass legislation suspending the tax, as the president cannot act unilaterally. Trump has not provided a timeline for the end of the Iran conflict or a specific plan for how the tax suspension would pass. Meanwhile, states may consider suspending their own gas taxes, which average 33.3 cents per gallon for gasoline, to provide additional relief. The outcome will likely depend on the political dynamics of the upcoming midterms and the pace of any legislative action.