Trump DESPERATE PLOY: End 18¢ Gas Tax

0:00 As the war in Iran rages, President Trump announced yesterday he was

0:04 in favor of suspending the federal gas tax.

0:07 This is according to the Wall Street Journal,

0:10 uh, which is basically writing up comments.

0:12 He told reporters in the Oval Office.

0:13 We can put the first element up on the screen.

0:15 Trump said, quote, "I'm going to," uh, he said gas prices will quote,

0:19 "drop like a rock after the war." And when he was asked

0:24 how long he would consider suspending the gas tax for, he said,

0:27 quote, "Until it's appropriate." Worth noting where AAA has gas prices.

0:33 The national average here we can toss up on the screen.

0:36 Uh $450 a gallon.

0:40 $4.50 a gallon as of today.

0:43 And when you scroll around the map, you see prices in California at $6.15.

0:50 Michigan $4.71.

0:53 Illinois almost $5 a gallon.

0:55 $4.97.

0:58 There are still some states where it's a bit lower.

1:01 Uh basically nowhere lower than $4 a a gallon

1:04 in most places much much higher than $4 a gallon.

1:08 So you can understand why President Trump would be feeling

1:11 the pressure to take that federal gas tax and suspend it.

1:16 Let's toss this Wall Street Journal element up on the screen as well.

1:19 3 looking down the barrel at what might happen what might be

1:22 happening in California just as we

1:24 discussed them already having skyhigh gas prices.

1:28 The journal has this piece.

1:29 Think $6 gas is bad.

1:31 It's about to get even worse in California.

1:34 Why is that?

1:34 Well, the state just got its last shipment of Middle Eastern oil sagger.

1:40 So, the pain is about to be felt.

1:43 Uh even this is the tip of the iceberg,

1:45 I think, is actually probably the best way to put it.

1:47 It's about to get much much much worse

1:49 around the country heading into the midterm elections, summer travel season.

1:54 It's then going to give way to fall election pressures.

1:57 And you're at this point asking to turn the Titanic around when

2:00 it comes to getting some of these refineries back up to capacity.

2:05 Even if you were to wave a magic wand, end the war today,

2:08 uh it's going to be a huge, huge problem for the administration.

2:13 And last thing I'll say is Senator Josh Holly introduced a bill

2:17 yesterday that would actually allow President Trump to sign this into law.

2:22 He it's pretty clear he can't do this by executive action.

2:25 So Republicans now getting on the bandwagon in Congress as well.

2:28 Yeah.

2:28 But at the end of the day, we're talking here about 18 cents a gallon.

2:32 Like that's just what we already have an Iran war tax.

2:35 The Iran war tax is what a buck 50 something like that.

2:38 You know, the California example is a very good one.

2:41 And it's something we've been trying to hammer home here because we always say,

2:44 "Oh, America is a net energy exporter." Yeah, that's true.

2:48 But what do we learn is that each individual region

2:51 of the United States is uniquely vulnerable to the conditions for gas.

2:56 That's why gas is a very different price in California than here.

2:59 A lot of people like to talk about how California has a high gas tax.

3:02 Definitely true.

3:03 Don't don't get me wrong.

3:04 However, onethird of California gas comes from the Middle East.

3:09 Why?

3:09 Well, they have to import a It's far away from a lot of the refineries.

3:13 They don't want refineries in California that well, you sign your own destiny.

3:17 Uh they don't want refineries.

3:18 We haven't built a new refinery in this country since the 1970s.

3:21 Most of them are being, you know,

3:23 constantly tinkered with and andor updated, but brand new ones not happening.

3:27 If you compare the Chinese refineries to ours, it's not even a question.

3:31 Uh granted, they have no environmental rags.

3:33 They can do whatever they want.

3:34 So, you know, it's definitely kind of complicated,

3:36 but the point is is that 75% of the oil in California comes from somewhere else.

3:42 Only 25% of it is domestic.

3:44 A third of it comes from the Middle East.

3:46 California is actually more reliant on crude oil shipments from Saudi,

3:50 Iraq, and the UAE than any other state in the nation.

3:53 Quote, "It'll take a month or two for flows to resume.

3:57 Then you still have all of the catching up to do." And so Iraqi oil actually

4:01 just came for the first time I think in a while to the shores of California.

4:05 I mean you know look at a map and think

4:06 about how long it's going to take to get there.

4:09 So gas prices as of Friday in California are 616 a gallon.

4:13 Diesel costs about 750.

4:15 That's a buck 82 more.

4:17 The state's stockpile of refined products such as jet fuel and diesel

4:21 are quote increasingly strained as big

4:23 Asian fuel suppliers including South Korea.

4:26 Slow exports to California are all being slowed down from everywhere else.

4:31 Because remember California because of all this importation of oil

4:34 means it's not only going to have the higher diesel price,

4:37 but all of these other refined products, the things that we use.

4:40 Only about 35,000 barrels a day refined products

4:43 are due to arrive from South Korea in May.

4:45 That is down from 100,000 barrels a day in April.

4:49 And it doesn't help that two of the state's

4:51 major refineries just closed in the last 6 months,

4:54 cutting off a fifth of its fuel making capacity.

4:57 Even if the straight reopens, its closure has already withheld at least

5:01 a billion barrels from the global market.

5:03 And California is getting as little relief

5:05 as large tankers from the Gulf Coast come in.

5:08 The Trump administration, remember, they did the Jones Act.

5:11 We've already spent enough time on on the Jones Act here on the show,

5:14 but the reason why I'm going deep into this is

5:16 it California is a very very extreme example.

5:18 Like put B2 up there on the screen just to show California at 615 uh a gallon.

5:24 But let's take some other states with high gas.

5:27 Illinois for example, right?

5:29 Illinois is at 490 a gallon.

5:31 And in fact, you know,

5:32 Michigan and Indiana and Ohio all actually have very very high gas.

5:37 Now people would say why?

5:38 Well, what was I reading about?

5:39 up a refinery that happens to produce the oil for those three

5:44 states had a problem at accident or something like that and so

5:47 that means that you have to take the oil offline which

5:50 means it's had to come from elsewhere via rail by truck whatever

5:53 and then same in the northeast corridor so Pennsylvania 466 a gallon

5:59 and in fact you know you have pretty high gas which is

6:02 colored there in red pretty much all along the Estella corridor even

6:06 in the states where you have all these refineries and you know,

6:09 it doesn't have to travel that far.

6:11 Let's say Oklahoma, you've got three night $3.94.

6:15 And even Texas, you know, the petroleum state is at four bucks a gallon.

6:18 This what this highlights is two things.

6:20 the global commodity of oil and two is just the sheer

6:23 complexity of moving oil all and gas all across the United States

6:28 and why you know one of the things it's very interesting

6:32 story is one of the biggest trading firms uh in the oil

6:36 markets is now betting that Trump will do an export ban

6:39 and what he's betting on is that just to explain you know

6:42 the exact mechanism he is betting on the spread between West Texas

6:47 oil futures and Brent crude futures the only way that would happen.

6:50 You know, even more so is if we had an oil export ban.

6:54 And this seems again like a clean talking point.

6:57 Yeah.

6:57 Well, just no more oil.

6:59 But that doesn't account for California getting

7:01 a third of its oil from the Middle East.

7:03 So where's the rest of it going to come from?

7:05 Are there refineries even set up to refine oil, let's say,

7:09 from Venezuela or from Texas or from anywhere else in the United States?

7:13 And if they are, how can we even get the oil over?

7:16 These are huge logistical problems to keep everybody on the road.

7:20 And in the long run, it would create more.

7:23 It would actually create individual shortages

7:25 probably like in California or elsewhere.

7:27 It might immediately actually lower the price here.

7:30 But in a month, maybe three, you would begin to see problems.

7:33 In six months, you're just going to have straight up, you know, a shortage.

7:36 And also it would actually dry up one of Trump's biggest talking points,

7:40 which is we're making so much money off

7:43 of this, which is technically true if you

7:46 are in Texas or if you are an oil company who are making money hands over fist.

7:50 So yeah, if you're in Midland or if

7:52 you're a Houston strip club owner, you're doing great.

7:55 U or a Ford F-150 dealer uh in Midland,

7:58 you know, this is it's Billy Bob Thornton.

8:00 Yeah, Sheran University.

8:02 Exactly.

8:02 I actually met a fan of ours who's a literal land man.

8:05 She was a woman though.

8:05 It was interesting.

8:06 Uh, so she was telling me about her land man.

8:08 Uh, I was like, "Wow." Okay.

8:10 So, apparently it's a real thing.

8:11 I had no idea.

8:12 But what you can actually see inside of the sto inside of this is just

8:18 the intricate nature in which all of this is just falling apart.

8:23 Like the gas tax, the fact that we already haven't done

8:25 it is nuts in my opinion because 18 cents a gallon.

8:29 Can I say go ahead?

8:30 Yes.

8:30 So, I just looked up the federal revenue from the federal gas tax every year.

8:34 About $23 billion a year according to Fox.

8:37 How much have we spent on the Iran war so far?

8:39 Oh, more than that.

8:40 Yeah.

8:40 The Pentagon's estimate, which is lowballing, is $25 billion.

8:44 So, it's just like oneonone, right?

8:45 So, just the gas tax is paid.

8:47 But it's such a good example of what

8:49 we prioritize and what we do not prioritize.

8:52 And yes, we do need money to maintain federal highways and such,

8:56 but we also don't need to start a war with Iran.

8:59 Yes, give me a break.

9:01 I'm with you.

9:02 All right.

9:02 Uh and yeah, it drives me nuts.

9:04 Let's put B4 up there on the screen.

9:06 Like for example, uh this was what I was talking about in our earlier block

9:10 is how the Iran war is draining the world's oil buffer at an unprecedented pace.

9:15 And they say global oil stockpiles have dropped by about 4.8

9:20 billion barrel million barrels a day between March 1st and April 25th,

9:25 far exceeding the previous peak for a quarterly draw down.

9:28 Crude accounts for almost 60% of the decline and refined fuels of the rest.

9:33 Crucially, the system actually does require a minimal amount of oil.

9:38 And I think we've explained this before where it's

9:42 not that it's like going to zero is so catastrophic,

9:46 you know, for a refinery and others that you need a minimal amount of oil.

9:51 Like it's actually apparently better for a refinery to go

9:54 from 100 to 10% than from 10 to zero.

9:57 Because when you go to zero,

9:58 I I don't again I don't fully understand all of it, but it's bad things happen.

10:02 You're not really supposed to turn it off,

10:03 and if you do, it takes forever to turn it back on.

10:06 So, the minimal amount of oil that you need to maintain like the current system,

10:10 we're approaching that within the next like 6 months to a year.

10:13 Now, I know I realize it's like, oh, well, that's far away.

10:16 Keep in mind,

10:17 it's May 12th.

10:19 War began on February 28th.

10:20 The war began when it was cold.

10:22 Now, it's not cold.

10:23 Think about it that way.

10:24 almost full season.

10:25 Like we're going into summer.

10:26 So it's like it's been a while actually since the war started.

10:30 So is it that inconceivable that you were to see it in three months uh from now?

10:34 Not really actually considering the way that everything has gone on.

10:38 So three more months of this which again

10:40 I don't think really is out of the question

10:41 considering the on again off again on again

10:44 uh that the administration has walked us into.

10:46 I don't know.

10:47 I I I don't see a way out of $6 a gallon.

10:49 I just No, I don't think you're I don't think you're wrong.

10:51 And I mean, obviously I support like more domestic production on this front.

10:55 And if it forces that, I think, you know,

10:57 maybe there's a a sick silver lining to all

11:00 of this, but I don't think that's actually what's happening at all.

11:02 Let's uh put this fortune headline on the screen.

11:05 This is B5.

11:06 Another huge part of this.

11:07 Uh the headline here is Iran war draining

11:09 words world's oil buffer at an unprecedented pace.

11:14 Uh and then we can move on also to the Financial Times headline.

11:17 This is B5.

11:18 Fuel, munitions, and food.

11:20 Trump's Iran war rips across US economy.

11:23 Uh this is not just about gas.

11:25 Not just about gas.

11:26 It is about prices that are going to increase across the board because

11:30 of how fully integrated into every product plastics for example that gas is.

11:37 And you're going to have obviously

11:38 what the Biden administration dubbed greedflation.

11:41 No question about it.

11:42 Already seeing it across the economy as well.

11:45 So it is just a geopolitical mess.

11:48 You don't need us to tell you that.

11:49 When you look at some of these, you just pull at some of these threads,

11:52 the extent of it becomes obvious.

11:54 I mean, the world oil reserves here, Sager, that is that's you, like you said,

12:01 there's just his his path to climbing out of this before the midterms.

12:05 Uh, but at all, oh, kiss that.

12:07 Good luck.

12:07 It doesn't even really matter.

12:08 What what you pointed to the Financial Times story,

12:11 it really is worth like going through some of it.

12:14 The direct price from the government is 25 billion.

12:17 So, what's the real number?

12:18 50 probably maybe 60 something like that.

12:22 And then if you start to go into all of the actual costs of the munitions,

12:27 which you know, if anybody watching the show,

12:29 we've gone through that adnauseium.

12:31 Mark Kelly recently just said the quiet part out loud

12:33 and the Pentagon wants to prosecute him cuz he was like,

12:36 "Yeah, it turns out that we're like critically low." I mean,

12:38 you don't need classified briefing to learn that.

12:40 You could just learn look at a spreadsheet.

12:42 It's very obvious.

12:43 But really what we're all seeing inside of it is from the fuel export problems,

12:49 the already keeping interest rates and all of that high.

12:52 Then the crazy part about it too is I

12:56 think it's it's consumer sentiment at an all-time low.

12:59 We're going to talk about that a little bit with Derek.

13:01 You've got AI kind of holding up the stock market.

13:03 You've basically got healthcare holding up the rest of the jobs market.

13:06 But the actual consumer experience of the average American is just miserable.

13:10 miserable on a day-to-day basis and gas.

13:13 I think it was already bad, you know,

13:15 going into this, not just because of tariffs, but largely as a result,

13:19 tariffs plus really of like the continuation of a lot of these economic forces.

13:23 And I think this just really put, you know,

13:25 it it put it like lit that feeling on fire.

13:29 Yes.

13:28 Much like Biden, you know,

13:29 things were already a problem for Biden and the Ukraine war happened.

13:32 It was just it eliminated it.

13:33 No, that's a really good point about the tariffs, too,

13:35 because the question of whether or not it's there's

13:37 certainty over investing in the United States for the future,

13:40 manufacturing, business, and the like, exports, um,

13:44 that was already precarious and there were a lot of countries.

13:48 I mean, the BRICS meeting is what in September.

13:50 So, uh, the realignment of some

13:52 of these really big geopolitical relationships is happening right

13:57 now in a sense that the Iran war thrust some of this over the edge, right?

14:02 like it was already in motion starting to gel

14:05 and then the Iran war uh just puts that into hyperdrive.

14:09 So it's it's really I mean for for Trump to leave office

14:14 with a genuine sense of having redrawn the world for the America

14:20 the interest of America first uh whatever that was like before the Iran

14:24 war has become you know the odds have become infantestimally small after.

14:29 Can I give you a prediction for China?

14:31 Let's do it.

14:32 Uh Trump, there's already a report out there.

14:34 Trump is is uh considering a $1 trillion investment package from China.

14:38 Here's what I predict.

14:40 We will have Chinese EVs in this country in the next five years.

14:42 That's my prediction.

14:43 That's a great prediction.

14:44 My prediction.

14:44 Did you see?

14:45 So Laura Ingram reacted to that right away

14:46 and said like catastrophic mistake on the break.

14:49 It's going to happen.

14:49 It's It's over.

14:50 He loves it.

14:51 He loves it.

14:52 It's It's not that he loves it.

14:53 He need It's It's the stars align for China already.

14:55 He does love it.

14:56 No, of course he But but what I'm saying is they have been they they're waiting.

15:00 They know he loves investment.

15:01 They're going to take the Toyota deal which is you

15:03 can build here but you have to build in America.

15:06 They're going to wave across all the IP things and there will be if

15:10 within five years there will be BYD cars on the road in the US.

15:13 That's my prediction uh from and they they will

15:16 be built they will almost certainly be built here.

15:18 Uh but that is the deal that they're going

15:19 to strike with uh with with Trump because he

15:22 loves the he loves the uh you know the investment

15:25 and they're going to pledge all of this stuff.

15:26 What they're good for the money.

15:27 We have the largest consumer market in the world.

15:30 That's that's my prediction.

15:31 He's gonna then have to bomb Car Island to keep the neocons happy, right?

15:35 Because they're going to be so pissed off.

15:37 No, they they'll they'll they'll stay quiet.

15:38 All they care about is Israel.

15:39 They don't actually care about China.

15:40 Uh that which is kind of how it's always been.

15:43 Hey, if you like that video, hit the like button or leave a comment below.

15:46 It really helps get the show to more people.

15:48 And if you'd like to get the full show,

15:50 ad free and in your inbox every morning, you can sign up at breakingpoints.com.

15:54 That's right.

15:54 Get the full show.

15:55 Help support the future of independent media at breakingpoints.com.