WASHINGTON (AP) — President Donald Trump said Monday he will move to suspend the federal tax on gasoline to help Americans shoulder surging fuel prices caused by the Iran war.
The president cannot suspend the federal tax on his own. Congress would have to approve the move.
Lawmakers from both parties have pushed for a gas-tax suspension, saying it would provide much-needed relief for families and businesses that rely on their cars and trucks to get to work and school and run everyday errands.
As of Monday, the average national gas price was $4.52 a gallon, according to the AAA motor club, 50% higher than the average price of just under $3 a gallon before Trump began the war against Iran.
The federal tax is currently set at 18.4 cents per gallon on gasoline and 24.4 cents per gallon on diesel fuel, an amount that does not include state taxes, which often are higher. The tax provides more than $23 billion per year in revenue for federal highway and public transit programs.
Asked by reporters at the White House how long the tax should be suspended, Trump said, “Until it’s appropriate.” While the tax is only a small percentage of the price of gas, “it’s still money,” Trump said.
As gas prices have spiked, the Trump administration has released millions of barrels of oil from the U.S. Strategic Petroleum Reserve and temporarily lifted sanctions on some Russian and Iranian oil shipments already at sea. The U.S. is negotiating with countries reliant on Middle East crude to join a coalition to police the Strait of Hormuz, where about one-fifth of the world’s traded oil normally flows.
Republican Sen. Josh Hawley of Missouri said on social media Monday that he will introduce legislation to suspend the gas tax. Democrats have previously sponsored similar legislation.
Rep. Anna Paulina Luna, R-Fla., also said in a post on X that she will introduce a bill “to suspend the federal gas tax in light of Trump’s recent remarks.”
The ongoing spike in gas prices has set off alarms among some Republicans that it could hurt the party's chances in the midterm elections. Trump has previously said higher fuel prices are worth paying to prevent Iran from getting a nuclear weapon.
That hardline message appeared to soften Sunday as Energy Secretary Chris Wright said the Trump administration was “open to all ideas,” including a suspension of the gas tax, during an interview on NBC’s “Meet the Press.”
A bill sponsored by Democratic Sens. Richard Blumenthal of Connecticut and Mark Kelly of Arizona would suspend the federal tax through Oct. 1. A similar measure was sponsored in the House by Democratic Rep. Chris Pappas of New Hampshire.
"Trump’s war of choice with Iran is driving up gas prices across the country — and Americans shouldn’t have to bear the additional economic burden of Trump’s reckless decision making,” Blumenthal said in introducing the bill.
Several states, including Indiana and Georgia, have recently suspended their taxes to alleviate high prices amid the war. Kentucky and Utah have reduced their state tax. Other states are weighing similar suspensions or tax reductions.
The gasoline tax is the single largest source of revenue for federal highway and public transit programs.
While proposed bills would offset any lost Highway Trust Fund revenue with general funds, the tax suspension could raise the federal deficit and jeopardize the long-term sustainability of investments for highway and public transit programs, according to the American Road & Transportation Builders Association, which represents the transportation construction industry.
The group cites studies showing that many retailers do not pass on the full amount of the gas tax reduction to consumers. Research also suggests that state and federal gas taxes are just one component of a complex pricing scheme that includes the global price of oil and other factors.
President Donald Trump speaks to reporters at an event about maternal healthcare, Monday, May 11, 2026, in the Oval Office of the White House, in Washington. (AP Photo/Jacquelyn Martin)
NEW YORK (AP) — Oil prices are rising Monday as the war with Iran threatens to drag on for longer, but the U.S. stock market is nevertheless inching toward more records.
The price for a barrel of Brent crude oil climbed 2.7% to $104.02 after President Donald Trump said the U.S.-Iran ceasefire was on “life support” after he rejected Iran's latest proposal to end their war. The rejection raises the stakes for Trump’s trip this week to China, where he could urge President Xi Jinping to pressure Iran into making concessions. Xi has leverage because China is the biggest buyer of Iran’s sanctioned crude oil.
The war has already sent the price for a barrel of Brent up from roughly $70 and delivered a blast of painful inflation through the global economy. That’s because it has shut the Strait of Hormuz and kept oil tankers stuck in the Persian Gulf instead of delivering crude to customers worldwide.
Still, the U.S. stock market has been setting records recently on hopes that the war will not keep oil prices high for very long. U.S. companies are meanwhile producing even bigger profits than analysts expected, while signals suggest the U.S. economy is holding up even though households are feeling discouraged by expensive gasoline and tariffs.
On Wall Street, the S&P 500 rose 0.3% from its record set Friday. The Dow Jones Industrial Average was up 107 points, or 0.2%, as of 2:18 p.m. Eastern time, and the Nasdaq composite was 0.3% higher and on track to set its own all-time high.
Mosaic helped drag on the market after the fertilizer company reported much weaker results for the latest quarter than analysts expected. The company is benefiting from higher prices for its products, but it’s also contending with much higher prices for sulfur and other raw materials because of logistics snarls created by the war with Iran.
Mosaic’s stock fell 1.5%, and more stocks within the S&P 500 sank than rose.
Stocks of companies whose customers have the least cushion to absorb higher gasoline prices struggled, and Dollar General fell 6.8%. Businesses with big fuel bills likewise had some of the market's sharpest losses, including drops of 4.4% for Carnival and 3.2% for Southwest Airlines.
Helping to offset that was Fox, which rose 4.8% after reporting stronger profit and revenue for the latest quarter than analysts expected.
More than four out of every five companies in the S&P 500 index that have reported their results for the latest quarter so far have topped profit expectations, and they're on track to deliver overall growth of nearly 28%, according to FactSet. If that turns out to be the case, it would be the best growth since the end of 2021.
Outside of earnings reports, Beazer Homes USA soared 34.8% after Dream Finders Homes offered to buy it in a deal valuing it at roughly $704 million. A combination would create the country’s seventh-largest homebuilder, and Dream Finders is asking Beazer’s shareholders to push its management and board to OK the deal after making several attempts itself.
Dream Finders added 1.5%.
Tech stocks were also strong, continuing their big run amid big spending in the boom around artificial-intelligence technology. Gains of 2.7% for Nvidia and 7.8% for Micron Technology were two of the strongest forces pushing upward on the S&P 500.
In stock markets abroad, indexes were mixed across Europe and Asia. France’s CAC 40 fell 0.7%, and South Korea’s Kospi soared 4.3% for two of the world’s bigger moves
In the bond market, Treasury yields held relatively steady. The 10-year yield rose to 4.40% from 4.38% late Friday.
Yields have moderated a bit this month, but they remain well above where they were before the war began. Higher yields can raise rates for mortgages and other kinds of loans going to U.S. households and businesses, which in turn can slow the economy. Higher yields also tend to push downward on prices for stocks and other kinds of investments.
A report on Monday said the pace of sales for previously occupied U.S. homes was weaker last month than economists expected.
AP Business Writers Chan Ho-him and Matt Ott contributed to this report.
FIL:E - The New York Stock Exchange is shown in New York's Financial District on Dec. 23, 2024. (AP Photo/Peter Morgan, File)
The South Korean-operated vessel HMM NAMU is docked after being damaged from a fire following an explosion in the Strait of Hormuz, at a port in Dubai, United Arab Emirates, Friday, May 8, 2026. (Kim Sang-hun/Yonhap via AP)
Options trader Justin Kanda works on the floor of the New York Stock Exchange, Thursday, May 7, 2026. (AP Photo/Richard Drew)
People walk in front of an electronic stock board showing Japan's Nikkei index at a securities firm Monday, May 11, 2026, in Tokyo. (AP Photo/Eugene Hoshiko)
People work and rest near an electronic stock board showing Japan's Nikkei index in an office building Monday, May 11, 2026, in Tokyo. (AP Photo/Eugene Hoshiko)
A man sweeps in front of an electronic stock board showing Japan's Nikkei index at a securities firm Monday, May 11, 2026, in Tokyo. (AP Photo/Eugene Hoshiko)
People stand in front of an electronic stock board showing Japan's Nikkei index at a securities firm Monday, May 11, 2026, in Tokyo. (AP Photo/Eugene Hoshiko)
