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

US President Donald Trump has moved to widen the use of tax-exempt red-dyed diesel, an effort to answer high fuel prices roughly a month before midterm elections. Yonhap, citing Politico, reported that Trump was planning an executive order and would highlight it at a Nebraska campaign rally; Hankook Ilbo reported that he formally signed the order at that Oct. 5 rally in Nebraska. Yonhap's second report described the step as an appeal to the farm belt. [ 1 , 2 , 3 ]

According to Politico's account carried by Yonhap, the order would direct the Treasury to review certain taxes levied 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 include a pause on enforcement of red-dyed diesel rules, so that transport trucks could use the fuel without penalty. Hankook Ilbo reported that the order removes the non-road use requirement entirely and that Washington plans a blanket enforcement pause for logistics vehicles using the fuel on highways. [ 1 , 3 ]

Trump said 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, he said drivers would save more than $100 every time they filled up, that farmers would save millions and that food and other prices would fall substantially. [ 1 , 3 ]

The move follows an earlier threat to ban all US diesel exports, which Trump left aside after European allies agreed to release reserves — Hankook Ilbo described it as pressure that produced a G7-level agreement on a reserve release, while Yonhap said the export ban was excluded once allies agreed. 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. The average diesel price that day was $6.32 a gallon, down 13 cents on the week but $2.63 above a year earlier. [ 1 , 3 ]

Analysts quoted by both outlets doubted the tax 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 ]

Politically, 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 also said the war with Iran would end soon, before or after the election, and that oil prices would then drop, and he pointed to last month's US-China summit, saying China had agreed to double purchases of US goods. Yonhap noted that Nebraska is a state Trump won in the last three presidential elections, and that it is unclear whether the measure will move farmers already frustrated by record diesel costs during harvest. [ 1 , 3 ]