Politics
Trump’s planned diesel relief could put state road funding in the balance
President Donald Trump is expected to announce federal steps to ease diesel costs, including a Treasury review of diesel taxes and pressure on states to expand access to tax-exempt fuel. Any state tax waivers could provide relief to farmers and other diesel users while reducing revenue for road repairs.
President Donald Trump is expected to announce a series of actions Monday aimed at lowering diesel costs, as high fuel prices add pressure on farmers and Republicans ahead of November’s midterm elections.
The planned announcement is set for a campaign stop in Nebraska. The measures include a Treasury Department review of certain diesel taxes and a directive urging states to make more tax-exempt, red-dyed diesel available. The fuel is used in agriculture, construction and other industries. The administration also plans to encourage states to waive some fuel taxes and to stop enforcing certain restrictions on dyed diesel, according to people familiar with the plans.
Some Republican governors have already taken similar steps involving dyed diesel. But waiving fuel taxes could leave states with less money for infrastructure, including road repairs. Some Republicans have opposed such waivers because fuel-tax revenue helps pay for those projects.
The administration’s effort follows weeks of shifting signals on diesel prices. Trump said Friday he would not pursue a ban on diesel exports, after previously saying he was considering one. The White House had rejected that approach.
Fuel prices have risen amid the war involving Iran and Ukrainian attacks on Russian refineries, according to the reported account of the administration’s rationale. Higher fuel costs have angered farmers during harvest season and contributed to inflation, creating political risks for Republicans in agricultural states and other closely contested areas.
Nebraska farmers and ranchers are also upset by Trump’s move to increase foreign beef imports ahead of November. The planned diesel measures come as the administration seeks to address concerns among rural voters, though the eventual impact on fuel prices—and on state transportation budgets—remains uncertain.