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The diesel export ban that President Donald Trump is mulling in a bid to bring down record-high prices would backfire in two ways — further dividing Hill Republicans while risking even pricier gasoline.
It’s not clear that the Trump administration will impose diesel export limits, which the president said this week that he’d explore as average national prices push past $6.50 per gallon. If Trump does push ahead, his main cheerleaders will be GOP candidates in tight races this fall who are eager to market more ideas to lower costs before the midterms.
But most congressional Republicans want nothing to do with the idea, no matter how close they are with the administration.
“The better policy would be for states like California to lift the restrictions that they’re imposing on the exploitation and the refining of diesel,” Sen. Bill Hagerty, R-Tenn., told Semafor. “Taking down domestic barriers that have been exerted by states — that, to me, is a far better approach.”
US oil executives have fought hard against a ban, warning it would push prices higher worldwide; the European Union recently echoed their concerns, as its own diesel costs climbed following Trump’s remarks. Energy analysts are just as critical, describing it as a Band-Aid at best — even if the constraints are nonbinding, as Energy Secretary Chris Wright suggested they could be in Pennsylvania on Thursday afternoon.
“The diesel export ban, even if in a strong-armed ‘voluntary’ form, is a desperate idea that promotes inefficiency and ultimately higher prices,” said Skanda Amarnath, a former Federal Reserve economist who now helms the left-leaning organization Employ America.
The frosty response from Trump’s own party is particularly notable after a year that began with Republicans stiff-arming his earliest ideas to lower the cost of living. Soon after, Trump pursued an Iran war that has since dragged on past the seven-month mark, straining the global economy and leaving voters increasingly pessimistic.
GOP lawmakers instead proposed alternatives like cutting gas taxes or tapping oil reserves: “We should be looking at multiple solutions,” Hagerty said.
Sen. Thom Tillis, R-N.C., lamented that “we always keep skating to where the puck is at the expense of getting to where the puck’s going to be,” calling the ban “just another example where, even in the White House, I think there’s disagreements about the pros and cons.”
“The president always makes the decision that is best for the American people,” a White House official told Semafor, adding that he “is evaluating all the options on the table.”
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GOP Senate candidates like Ashley Hinson in Iowa and Mike Rogers in Michigan say a ban is necessary to bolster their states’ struggling agricultural producers.
Sen. Susan Collins, R-Maine, who also faces a tough race, said she hasn’t “had the chance to look at” the proposal. Like Hagerty, she proffered a different solution: releasing heating oil from a federal reserve ahead of the winter.
Oil-state Republicans are harshest of all in their criticism: Sen. John Cornyn, R-Texas, derided it as “a gimmick” that “won’t work.”
As plummeting consumer sentiment emboldens Democrats to push farther into GOP-held territory despite a cash deficit in some key races, they see the export ban as proof of the GOP’s desperation this late in the cycle.
“Republicans can try one gimmick after the other, but they refuse to deal with the source of the problem,” House Minority Leader Hakeem Jeffries told reporters this week. “Go tell Donald Trump to end that war in Iran that no one in America asked for in the first place.”
While there is already legislation that would restrict diesel exports, the Trump administration doesn’t need Congress to act, legal experts told Semafor. Trump can impose a ban unilaterally thanks to sweeping authorities provided by the International Emergency Economic Powers Act — the same law that provided his initial authority for tariffs since struck down by the Supreme Court.
“This would be a very straightforward thing to do under IEEPA,” said Georgetown Law’s Peter Harrell, a former State Department official who later oversaw supply chains on former President Joe Biden’s National Security Council and National Economic Council.
Trump needs to declare oil shortages a national emergency, Harrell said, and sign an executive order restricting diesel exports. The order could allow the Energy Department to make some exemptions “in case there is some unforeseen adverse consequence,” he added.
Trump also has the option of wielding the Defense Production Act, as he did to crack down on exports of critical minerals and protective equipment. “But that would be more complex,” Harrell said.
Room for Disagreement
The small group of Republicans who have called for a ban to tamp down prices say it’s a necessary step to shield farmers and consumers from the Iran war’s economic fallout.
Sen. Chuck Grassley, R-Iowa, said on the Senate floor this week Trump should impose the embargo by executive order to “help family farmers who feed and fuel the world.”
Eleanor and Nick’s View
Democrats see the response to Trump’s latest idea as proof that Republicans are flailing, but we see the clearest sign yet of what our colleague Burgess identified earlier this week: A GOP long in this president’s thrall is suddenly moving past him at an increasingly fast clip.
The degree of blunt talk we heard from Trump’s party about the economic and political downsides of a ban — at least, on the record — would have been unimaginable last year.
Notable
- Morgan Stanley analysts also warned Thursday that the proposed ban would push up gasoline prices, as reported by OilPrice.com.