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- Connor Quincy via RawStory - World News
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Economist Warns Trump's Diesel Export Ban Threat Could Backfire on U.S. Economy
ReEconomist Warns Trump's Diesel Export Ban Threat Could Backfire on U.S. Economy
University of Michigan economist Justin Wolfers says the president's openness to banning diesel exports mirrors the economic pressure campaign used against Iran and contradicts his own trade agenda, with potential fallout for energy investors and refining regions.
An economist is warning that President Donald Trump's suggestion he would consider banning diesel exports would turn a key U.S. economic weapon against the country itself, at a moment when diesel prices have reached record highs.
Justin Wolfers, an economist at the University of Michigan and founder of the Platypus Economics newsletter and podcast, raised the concern during a Wednesday episode of «The Trump Report» with host Maddie Hale. The two were discussing Trump's stated openness to halting diesel exports as domestic prices climb.
Wolfers compared the idea to the economic pressure campaign the United States has waged against Iran, which he described as an «economic D-Day» aimed at choking off Tehran's 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,» Wolfers 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 proposal runs «upside down» and «back to front» from Trump's own trade agenda, which has centered on tariffs aimed at reducing the trade deficit and encouraging more exports and fewer imports. «So he wants America to be exporting more and importing less. What is he suggesting? There's not even a word in my textbook for a tariff on exports,» Wolfers said, adding that the idea is «the opposite of what the president thinks and what the president thinks was mixed up to start with.»
The economist said a ban would address a narrow problem while amounting to an «absolutely absurd economic solution.» Consumers might see cheaper diesel at the pump, but the consequences would ripple outward. «Anyone whose 401(k) owns stock in an energy company, that energy company's now losing a lot of revenue,» Wolfers said. Refining and drilling regions in Texas, he warned, «are going to be somewhat depressed.»
Wolfers also noted that little stands in the way of such a move because the idea is so widely regarded as misguided that no one ever codified a prohibition against it. He questioned the timing as well, pointing out that while high gasoline prices have angered «moms and dads and regular voters,» the president never once considered restricting gasoline exports. Diesel, by contrast, is used by «farmers and truckers» and by «corporations, big agriculture, transportation companies.»
Beyond the domestic effects, Wolfers said the proposal sends a troubling signal to allies about the reliability of the United States as a trading partner. «The point is we are so unreliable we're not even pursuing our self-interest,» he said.
The remarks land as diesel prices hit record highs, putting the administration in the difficult position of weighing consumer relief against the health of the domestic energy industry and the country's standing in global commerce. Wolfers' critique suggests that any move to restrict exports would not only conflict with the administration's stated goals on trade but could also undermine the very sectors the president has sought to promote.
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