Trump signs order widening tax-exempt diesel use ahead of US midterms

US President Donald Trump signed an executive order at an Oct. 5 rally in Nebraska widening the use of tax-exempt red-dyed diesel, Hankook Ilbo and Seoul Economic Daily reported. Yonhap, citing Politico, had reported that an order was being planned and would be highlighted at the Nebraska rally; Seoul Economic Daily described the step as an appeal to farm-belt voters about a month before midterm elections. [ 1 , 3 , 4 ]

According to Politico's account carried by Yonhap, the order would direct the Treasury to review certain taxes on diesel, instruct states to expand access to red-dyed diesel — normally reserved for farm and construction machinery because it is exempt from federal fuel tax — and recommend that they waive certain diesel fuel taxes. It would also pause enforcement of red-dyed diesel rules. Hankook Ilbo reported that the order removed the non-road use requirement entirely and that Washington plans a blanket enforcement pause for logistics vehicles using the fuel on highways; Seoul Economic Daily reported the same elements. [ 1 , 3 , 4 ]

Trump told reporters at the White House before leaving for Nebraska that he would help farmers on the diesel issue, adding that his administration was doing much for farmers, Yonhap reported. At the rally, according to Hankook Ilbo and Seoul Economic Daily, he said drivers would save more than $100 every time they filled up, that farmers would save millions of dollars and that food and other prices would fall substantially. [ 1 , 3 , 4 ]

The move follows an earlier threat to ban all US diesel exports, which Trump set aside after European allies agreed to release reserves. Politico, via Yonhap, cited research firm ClearView Energy Partners as saying that as of Oct. 2, ten states accounting for a third of US diesel consumption had already broadened colored diesel use, and several states had exempted diesel used in farm vehicles. Yonhap cited an average diesel price of $6.32 a gallon, down 13 cents on the week but $2.63 above a year earlier. [ 1 , 3 ]

Analysts quoted by Yonhap and Hankook Ilbo doubted the measures would solve the price problem. Patrick DeHaan, head of petroleum analysis at GasBuddy, said on X that road users could save about 60 cents a gallon but that farmers already use colored diesel and still pay record prices, adding that the issue is supply, not taxes. Denton Cinquegrana, chief oil analyst at Dow Jones Energy, told Politico that a diesel tax waiver could bring short-term relief at the pump while having a longer-term effect on transport infrastructure, Yonhap reported. [ 1 , 3 ]

Trump used the rally to shift blame for fuel costs, saying on Truth Social that the Strait of Hormuz is no longer what is pushing gasoline prices up and that the real problem is refinery capacity, which he attributed to Ukrainian strikes on Russian refineries and to closures of US facilities under Democratic state regulations, Hankook Ilbo reported. He said the war with Iran would end soon, before or shortly after the election, and that oil prices would then fall, and he pointed to last month's US-China summit, saying China had agreed to double purchases of US goods. Seoul Economic Daily, citing Bloomberg, said the Nebraska visit itself signals a shifting Senate map, noting Republican Senator Pete Ricketts's reelection bid and improved Democratic odds in Iowa and Kansas. [ 1 , 3 , 4 ]

Yonhap and Hankook Ilbo both said it is unclear whether the measure will move harvest-season farmers who are already frustrated by high diesel costs. Yonhap noted that Nebraska is a state Trump won in the last three presidential elections; Seoul Economic Daily, citing Bloomberg, said the visit acknowledged Republican trouble even in rural strongholds. [ 1 , 3 ]