Trump's administration wants to make U.S. tax reform competitive, Watson said during an interview on CNBC's "Closing Bell." Specifically he discussed a proposed bill — a border-adjustment tax — that could hike rates on American imports.
Despite concerns that a border tax could hurt oil prices, Chevron's Watson said industry imports would "come into balance" over time. "The unpredictable effects of the U.S. dollar strengthening is what concerns a lot of people," he explained.
A border-adjustment tax would likely result in the appreciation of the dollar, to ease the burden of hiked prices on consumers. Would this hurt a company such as Chevron? Not so fast, Watson said.
"I think what you'll see is a disconnect," he explained. U.S. oil prices might rise, but international prices would offset this.
And Chevron wouldn't try to move money offshore, either, CEO Watson told CNBC. "What we'll tend to do is take the cash flow that's generated ... and we'll recycle it into shorter cycle-time investments — the portfolio of assets we have in the U.S., in the Gulf of Mexico, in California and elsewhere."
Since former Exxon Mobil Chief Executive Rex Tillerson joined the Trump administration, Watson said he's visited with White House staff on multiple occasions and has been encouraged by those meetings.
"We've seen a more pro-business environment ... I think the approach they're taking toward business — toward enabling our economy to grow again — is a real positive."