Commentary

Senators Seek Diesel Export Ban to Halt Soaring Prices

Trump must “do something” is the new battle cry by farm state Senators.

Senator Grassley Seeks Embargo

America First

“W diesel $6.57 in Iowa why doesn’t Pres Trump put an embargo on diesel exports like presidents in the 70s put embargoes on ag products bc food prices were inflated. High diesel prices ARE KILLING FARMERS INCOME”

Grassley’s term is not up this midterm, but Iowa Senator Joni Ernst’s term is. Trump forced her out and she retired. Now the seat is up for grabs.

Grassley’s tweets are essentially an ad for Democrat Josh Turek over Ashley Hinson, the Republican nominee.

Republicans Worried Over Diesel

The Wall Street Journal reports Worried Republicans Float Ideas to Lower Diesel, Gas Prices Before Midterms

Lawmakers have floated ideas including a federal gas-tax holiday or a ban on diesel exports, while acknowledging the Iran war is the critical driver of prices. The fighting, which started in February, has become a vulnerability for President Trump and his party, after he promised no new “forever wars” and pledged to bring down prices.

Senate Majority Leader John Thune (R., S.D.) said last week that he was open to exploring a diesel-export ban. But later he said it was up to the Trump administration to get shipping flowing again through the Strait of Hormuz. “That’ll take the pressure off,” Thune said.

The Senate has scheduled only two more weeks in session ahead of the election, and there are no plans to vote on a suspension of the gas tax or another measure designed to lower fuel prices. Even if senators did pass a bill, the measure wouldn’t make it to the president’s desk soon, as the GOP-led House recessed last week.

Some Republicans would rather not talk about it.

“See you later,” Sen. John Barrasso of Wyoming, the No. 2 Senate Republican, told a reporter who asked what Congress or the administration could do about high diesel prices. Asked on NBC’s “Meet the Press” on Sunday if he would support an export ban, Barrasso replied: “Well, the president is considering a number of different things that he can do.”

“I don’t think there’s gonna be a discernible decrease over the next 48 days before the election,” said Sen. Thom Tillis (R., N.C.), who is retiring after this term, when asked about the possibility of lowering fuel prices. Asked if there would be consequences for Republicans at the ballot box, Tillis said, “Elections are always pocketbook issues, right?”

Trump nodded to his frustration with diesel prices Monday, posting on social media that the Russia-Ukraine war has put many Russian diesel refineries out of commission. “This ridiculous and never ending War with Ukraine must be ended,” he said.

[Senator] Kennedy traveled to Kansas, Nebraska and Iowa this weekend to help raise money and campaign for embattled Republican candidates, in states Trump won by double digits in 2024. He said he is confident Republicans ultimately will prevail, but the races will be tight.

“If you told me six months ago I was gonna be having to spend my time in those three states, I wouldn’t have believed you,” Kennedy said. “Those ought to be fat-guy layups for us.”

Republican Sen. Pete Ricketts, who is trying to fend off independent Dan Osborn in Nebraska, said there is “no doubt” that rising fuel prices are putting a huge strain on farmers and ranchers in his state. But the senator said farmers and ranchers, who tend to vote Republican, understand that Iran can’t be allowed to have a nuclear weapon.

Rep. Andy Harris (R., Md.), chair of the conservative House Freedom Caucus, had pushed to vote on a gas-tax holiday before the House left town on Wednesday. But he ran into opposition from Republicans who fret that suspending the gas tax would deplete the Highway Trust Fund, which depends on gas-tax revenue.

Sen. Josh Hawley (R., Mo.) warned that it is a mistake for lawmakers not to do anything to address fuel prices before the election. Hawley said the Highway Trust Fund could be replenished later from other sources.

“For candidates who are going home and campaigning, and voters say, ‘What have you done to bring down energy prices?’ I mean, I don’t know what these candidates are going to say,” he said.

What’s Going to Happen?

Likely Nothing.

The House is on recess through the election. The Senate is scheduled to go on recess on October 3, 2026.

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An export ban would also upset Trump’s energy friends. A diesel ban just points to how stupid this war has been.

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Republican Senators want Trump to do something.

He already did.

It will be a Blue Wave in November.

Article posted with permission from Mish Shedlock

Mish Shedlock

Mike Shedlock / Mish is a registered investment advisor for SitkaPacific Capital Management. On “MishTalk,” global economics blog, he writes several articles a day on the global economy. Topics include interest rates, central bank policy, gold and precious metals, jobs, and economic reports, all from an Austrian Economic perspective.

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