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Market Chatter: Trump Proposes to Reduce or Suspend Federal Tax on Gasoline

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US President Donald Trump has suggested he will either reduce or suspend the federal tax on gasoline to curb rising prices for the fuel amid the Iran war, according to comments to the press on Monday, a video of which was posted by The Hill on YouTube.

When a reporter asked if he was going to suspend the tax, Trump answered "I'm going to reduce until the..." then switched to talking about his expectation that gasoline and oil prices will "drop like a rock" once the conflict ends.

When asked for how long will he suspend the tax, he said, "Until it's appropriate. It's a, you know a small percentage, but it's still money."

The incomplete phrasing suggests he intends to either reduce or suspend the tax, which would follow in the footsteps of many other countries that reduced or suspended the tax as a means of controlling price inflation in response to the energy shock.

While his answer to the question was unclear, Trump talked at length about the fact that buyers are turning increasingly to the US for energy supplies.

He said that the country is investing in logistics capacity to meet the new demand, which he expects to last beyond the duration of the conflict in the Middle East and he described the US as "a big filling station."

"When it first came about 20% of the oil came out of Hormuz, that's a lot, but you know with time, they're going to Texas, they're going to Louisiana, they're going to Alaska ... Alaska, it seems like it's very far away from Asia but it's actually a relatively short trip by comparison to other locations they have to go to to get oil and they're going to Alaska," Trump said.

"Some of those people (buyers) are going to continue to go to Texas. They like it better. They said it's an extra 45 minutes.

They like it better. It's sort of amazing. A lot of people thought oil would go to 250, 300 dollars. It's not."

"Today it's less than 100 dollars. Think of that. When this ends you are going to see it drop like a rock."

has reached out to the White House for a comment.

(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)

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