Diesel Becomes Trump's "Hot Potato" for the Midterm Elections! Frequent Policy Moves Yet Prices Remain Hard to Bring Down, Fiscal and Political Costs Both Rising

As the November midterm elections approach rapidly, U.S. President Trump is rolling out a series of costly and politically risky solutions to the thorny issue of diesel prices. The Trump administration has already provided billions of dollars in funding to farmers, relaxed regulations for truck drivers, eased sanctions on Russian fuel, and pressured European allies to release emergency reserves. Yet diesel prices rose again last week, leaving Trump having invested political capital and fiscal resources without achieving the price relief his party hopes voters will see when they head to the polls. Data from the U.S. Energy Information Administration (EIA) shows that as of the most recent week, U.S. diesel prices rose nearly 10 cents per gallon to an average of $6.28, reversing two consecutive weeks of declines and continuing to hover near historic highs. Over the past two months, diesel has become one of the central issues in the U.S. midterm elections and a catalyst pushing already elevated U.S. inflation even higher. Diesel is critical for farmers, construction companies, freight operators and many other industries, and data released by the U.S. government last week showed that rising diesel prices have to some extent driven up distribution costs, early-stage food production costs, and even toy prices. Republicans are defending their slim majorities in both chambers of Congress, and the high cost of living is one of voters' top concerns. A poll conducted in October showed that nearly 80% of Americans believe Trump is responsible for rising costs. Political pressure is particularly acute in traditionally Republican "Farm Belt" states such as Iowa and Kansas. In these areas, rising fuel and fertilizer costs, trade disruptions and a weak agricultural economy have intensified discontent among some of Trump's core supporters. Trump has vigorously promoted his diesel-related measures at campaign rallies in the region. At a rally in Nebraska, he took the stage to sign an executive order allowing highway vehicles to use red-dyed diesel; at a rally in Kansas on Monday, he announced a new $8 billion round of agricultural aid. These measures reflect the various trade-offs Trump has accepted in seeking short-term relief. The new aid further strains federal spending, while easing sanctions on Russian fuel could help Moscow finance its war in Ukraine. Meanwhile, against the backdrop of threatening to restrict U.S. diesel exports, Trump's pressure on European allies to release emergency reserves has also caused diplomatic friction. Chris Borick, a pollster and political scientist at Muhlenberg College in Pennsylvania, said: "Presidents tend to prioritize short-term gains over long-term losses, and I doubt there are even any achievable short-term gains here." The White House attributes high diesel prices to "pre-existing problems" including years of refinery closures and damage caused by Russia's war in Ukraine, while defending Trump's efforts to lower costs. White House spokesperson Taylor Rogers said: "The President wants diesel prices to come down, which is why he has taken historic action to let American farmers, truck drivers and workers keep every hard-earned penny." Doubts and Unresolved Questions One of Trump's most direct attempts to lower diesel prices has struggled to gain traction. This month, Trump signed an executive order allowing truck drivers to use red-dyed diesel on highways. This type of diesel is typically used for off-road purposes such as agricultural machinery, while temporarily exempting certain federal tax filing and record-keeping requirements. But the Internal Revenue Service (IRS) did not eliminate the federal diesel tax, only temporarily waiving related filing requirements and corresponding penalties through the end of this year, leaving truck stops and fuel sellers facing uncertainty. David Fialkov, chief lobbyist for NATSO, the trade organization representing operators of the largest truck stops in the U.S., said its members recognize Trump's efforts to address diesel costs, but the guidance remains "ambiguous" and carries excessive risks. He said: "I really don't see how these red-dyed diesel announcements can have any meaningful impact on diesel prices." Trump has also begun using federal government funds to provide a buffer for groups under cost pressure. This year, U.S. government aid to farmers is expected to exceed $47 billion, including commodity-related subsidies and $12 billion in tariff relief funds distributed by the U.S. Department of Agriculture earlier this year. The new $8 billion agricultural relief plan will bring total government aid to farmers to a record $55.4 billion, surpassing the previous high of $45 billion in 2020, when farmers received pandemic-era assistance. This funding can help farmers cope with rising costs and lost sales, but it does not directly address the market supply disruptions driving up fuel and fertilizer prices. The aid has also raised questions about whether taxpayers should compensate producers for losses that agricultural groups say are partly related to the Trump administration's own trade and foreign policies. Rob Larew, president of the National Farmers Union, said: "This is the second round of emergency aid this year to cover losses that were largely foreseeable." "Trade disruptions and fuel cost increases related to overseas conflicts have left family farms struggling, and one-time subsidies cannot provide the stability they need to plan for the future." U.S. Department of Agriculture official Richard Fordyce said Friday that the aid will be distributed after the November 3 election, and farmers may not receive funds until the end of the year. Russian Fuel Sparks Friction Some of Trump's measures aimed at increasing diesel supply carry geopolitical trade-offs. Trump decided to ease sanctions on Russian diesel. These sanctions were originally intended to limit Moscow's energy revenue and weaken its ability to finance the war in Ukraine. The decision has drawn bipartisan criticism and raised the question of whether it can actually effectively lower U.S. fuel prices. Trump defended easing the sanctions as necessary to persuade Russian President Putin to engage in negotiations to end the war in Ukraine and to secure the release of American prisoner Stephen Hubbard. As the administration's efforts to intervene to lower fuel costs have failed to work, Trump has begun blaming Ukraine and President Zelensky more than the war with Iran as the election approaches. Analysts say the U.S.-Iran conflict is the bigger driver of surging diesel prices. That conflict disrupted global oil flows and refined fuel supplies, while Ukraine's attacks on Russian refineries, although helping tighten supply, have had a relatively limited impact on prices. Edward Fishman, director of the Maurice R. Greenberg Center at the Council on Foreign Relations, said: "In my view, this looks more like an effort to shift blame and find a scapegoat than a genuine attempt to curb price increases on the eve of the election."