Trump to issue executive order expanding access to tax-exempt diesel fuel

President Donald Trump is scheduled to announce a series of executive actions on Monday aimed at lowering high fuel costs. The announcement will take place during a campaign stop in Nebraska, according to three people familiar with the plans. These moves come as surging fuel prices, driven by the ongoing war against Iran and Ukrainian attacks on Russian refineries, have angered farmers and contributed to persistent inflation ahead of the November midterm elections.

Expanding Access to Tax-Exempt Diesel

The executive order will direct states to do more to increase the availability of tax-exempt red-dyed diesel. This type of fuel is used in farming, construction and other industries. The order also urges states to waive certain fuel taxes. Additionally, the actions include "non-enforcement of dyed diesel limitations." Some Republican governors have already taken similar steps regarding dyed diesel.

Treasury Department officials are also conducting a review of certain taxes for diesel. Trump officials have been preparing action around dyed diesel for more than a week. The timing of the announcement follows a period of chaotic messaging on high diesel prices. On Friday, Trump stated he would not impose a diesel export ban, reversing previous statements that he was considering the option.

Political and Economic Context

The high diesel costs and the president’s step to increase foreign beef imports have riled farmers and ranchers at the peak of harvest season across deep-red and battleground states. The administration seeks to address these concerns before the midterms, where persistent inflation threatens Republicans’ hold on Congress.

However, the proposal faces opposition within the party. Some Republicans have opposed efforts to waive excise taxes on diesel because states use those revenues to pay for infrastructure projects such as road repairs.

Why it matters

The executive actions represent a direct federal attempt to mitigate the impact of global supply chain disruptions on domestic fuel prices. By targeting tax-exempt diesel and urging state-level tax waivers, the administration aims to provide immediate relief to industries heavily reliant on diesel, particularly agriculture. The move highlights the tension between federal efforts to curb inflation and state fiscal needs, as well as the political pressure on the administration to address economic grievances in key electoral states ahead of the November midterms.

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Sources

• politico.com: Trump plans executive order seeking to bring down high diesel costs - POLITICO
• ft.com: Subscribe to read

This article was drafted with AI assistance and checked against the sources above. Company claims are reported as claims. Cover image is AI-generated.