5 minEconomy
Economist Warns Trump's Diesel Export Ban Threat Would Backfire on U.S. Economy
Economist Justin Wolfers says the president's openness to banning diesel exports mirrors the economic pressure campaign once aimed at Iran and contradicts his own trade agenda, with consequences for energy investors and refining regions.
An economist is warning that President Donald Trump's stated openness to banning diesel exports would turn a weapon the United States has aimed at foreign adversaries against the American economy itself, with ripple effects for energy investors, refiners, and the broader commercial reputation of the country.
Justin Wolfers, an economist at the University of Michigan and founder of the Platypus Economics newsletter and podcast, made the argument during a Wednesday episode of «The Trump Report» with host Maddie Hale. The two were discussing Trump's claim that he is open to banning diesel exports as U.S. diesel prices hit record highs.
Wolfers compared the proposal to the pressure campaign the United States has waged against Tehran over its energy sales. «The U.S. hates Iran. So, in order to destroy the Iranian economy, they had economic D-Day in which they've tried to prevent Iran from exporting energy to get money,» he said. «The president has just voluntarily said he wants to get the U.S. to stop exporting energy to get money. He's applying the same economic policy to the United States as to Iran. That's kind of bonkers, right?»
Hale said she had not considered the comparison in those terms. Wolfers argued the idea runs «upside down» and «back to front» from Trump's own trade agenda. The president, he noted, has imposed tariffs on imports out of concern about the balance of payments and the trade deficit, with the stated goal of having America export more and import less. A ban on diesel exports would do the opposite. «There's not even a word in my textbook for a tariff on exports,» Wolfers said, adding that the proposal is «the opposite of what the president thinks and what the president thinks was mixed up to start with.»
He described the measure as one that «would solve a narrow problem and be an absolutely absurd economic solution.» Consumers would see cheaper diesel at the pump, Wolfers acknowledged, but the gains would come at a cost. «Anyone whose 401(k) owns stock in an energy company, that energy company's now losing a lot of revenue,» he said. Refining and drilling regions in Texas, he warned, «are going to be somewhat depressed.»
Wolfers also pointed to a legal vacuum around the idea. There is little to stop such a move, he said, because «it's so widely understood it's a dumb move that no one ever bothered signing anything to say don't do it.»
He questioned the timing and the targeting of the proposal. High gasoline prices have angered «moms and dads and regular voters,» he said, yet «the president never once thought about restricting exports of gasoline.» Diesel, by contrast, is consumed by «farmers and truckers» and by «corporations, big agriculture, transportation companies.»
Beyond the domestic effects, Wolfers said the proposal sends a signal to allies that the United States cannot be trusted on basic commerce. «The point is we are so unreliable we're not even pursuing our self-interest,» he said.
The remarks land as diesel prices sit at record highs, a squeeze that falls heavily on freight, farming, and industrial operators who depend on the fuel to move goods and run equipment. Restricting exports could ease domestic prices in the short term, but it would also reduce revenue for the energy companies that produce and refine diesel, with knock-on effects for shareholders and for regional economies tied to oil and gas.
Wolfers' broader point is that the proposal inverts the logic of the administration's trade policy. Tariffs on imports are meant to shrink the trade deficit by reducing purchases from abroad. An export ban would shrink export earnings instead, working against the same balance-of-payments goal. The absence of any legal safeguard, he suggested, reflects how unlikely the idea has long seemed to policymakers and how quickly that assumption can change.
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