With diesel prices squeezing truckers, farmers and the businesses that rely on them, President Donald Trump on Monday signed an executive order that temporarily lets off-road diesel be used on the highway without the usual tax hit.
Trump signed the order onstage at a campaign rally in Grand Island, Nebraska, the Associated Press reported, four weeks before the Nov. 3 midterm elections.
What the order does
Diesel sold for off-road uses such as farming, construction and heating is exempt from federal and state fuel excise taxes and is dyed red so law enforcement can spot it in vehicles on public roads. Using it on the highway normally brings penalties and back taxes.
According to a White House fact sheet, the order:
- Directs the Treasury secretary to defer payment of the federal excise tax on on-road use of dyed diesel for the rest of the year without interest or penalties, and to explore ways to eliminate the deferred tax obligation altogether.
- Tells the Transportation secretary to coordinate with states, industry and labor groups on access to dyed diesel.
- Directs the Agriculture secretary to ensure farmers can get dyed diesel in high-demand areas.
- Asks the White House intergovernmental affairs office to encourage more states to adopt matching policies.
Because state fuel taxes are separate, the federal deferral does not by itself waive state taxes or enforcement; the White House said governors can use their own discretion.
Promises and doubts
“The typical trucker will save more than $100 every time they fill up,” Trump told the crowd, according to the AP, adding that farmers would save “millions and millions of dollars.” He also acknowledged his unfamiliarity with the fuel: “I don’t know what the hell it is,” he said. “But whatever it is, it’s supposed to be very good.”
Patrick De Haan of GasBuddy noted last week that such a move could save money for on-road users but not for farmers, who already use dyed diesel. “Taxes aren’t the problem, supply is,” De Haan wrote on X, the AP reported.
The White House blamed tight global diesel supply on the Russia-Ukraine war and a lack of refining capacity, while the AP reported that prices spiked in the aftermath of the Iran war.
The politics
The signing was part of what Trump calls a 32-day blitz of rallies before the midterms. In Nebraska, he appeared alongside Sen. Pete Ricketts, who faces independent Dan Osborn, and Gov. Jim Pillen. The AP reported that Trump may also travel to several battlegrounds before Election Day, including Arizona, though a person familiar with the plans cautioned that they could shift.
For Arizona’s long-haul truckers, ranchers and food distributors, the practical effect will depend on how quickly Treasury acts and whether state officials follow with their own relief.
Photo: DanTD via Wikimedia Commons (CC0 public domain dedication). A tractor-trailer on Interstate 10 in Suwannee County, Florida, April 2024; generic file image.
Sources: Associated Press (via WRAL); White House fact sheet.
This article was produced with AI assistance and is based on reporting from Associated Press (via WRAL) and White House fact sheet.