Trump's midterms panic now threatens global diesel markets

There's a case to be made that, while Trumpism is not actually a disease—not even Trump's special blend of megalomania, narcissism, and truly historic levels of stupidity can really be counted as such—the effects of Trumpism have clumped together into something resembling a contagion.

Looking back at the first (sigh) two years of Trump's second term, it started where the Covid-19 pandemic left off. Trump led his minions on a rampage through government, and the result was broken departments that couldn't function because there simply weren't enough people manning the offices. Trump is shuttering public spaces, but this time it's not out of a concern for public safety but because the man wants his damn name on the buildings and his damn blue paint in the pools and if you're not going to give him that then he's going to put it all behind barricades and you're not going to be able to look at any of it.

Mostly, though, it's Trump's tariffs that have been tearing through the world economy with pandemic effects. Even after the body counts had subsided, the economic impact of factories worldwide closing down unpredictably for unpredictable durations, in the era of "just-in-time" logistics, was enormous. Supply chains got wrecked and stayed wrecked; companies had to scramble to replace widget shipments that were no longer coming; just when one shipping crisis had been resolved, new ones would crop up.

The effects on international business were severe, and it lasted for years. Consumers paid the price in short-term supply shortages for goods like toilet paper and in price hikes for everything—companies weren't going to simply eat the costs of reworking their crucial supply networks, after all—and all of society soon became meaner and more short-tempered as the effects of everything around them wore them down to their cores.

Trump's on-again, off-again random tariff announcements have done a damn fine job of reproducing those pandemic-era supply chain crises. Nobody can guess what the true cost of anything is going to be, not here or elsewhere, because nobody knows when the next random tax will be imposed. Or retracted. Or imposed and retracted and imposed again. Small businesses have been devastated not just from the new costs, but from the inability to plan; large businesses are muddling through, never knowing whether their next shipments from China or Canada are going to go through or be blown up on any given White House weekend, all depending on whether Donald got pissed off by something he saw on television.

So we've now had pandemic-level price hikes for seven quarters now along with worse-than-pandemic economic insecurities, and for five of those quarters we weren't in a rabidly insane and pointless war in the Middle East that added "worldwide oil crisis" to the mix. This White House is the Ebola of world markets. If they touch something, it dies.

Their latest move is a threat to touch U.S. diesel markets. It's going to be a fiasco.

The Trump administration is preparing a plan to ban exports of diesel for 90 days, despite splits inside the administration and with the oil industry, in a bid to bring down energy prices weighing on Republicans leading into the midterms, five people familiar with the discussions said Wednesday.

That's from Politico, which goes on to report that (1) yes, this is intended to get Republicans through the midterms rather than as any real solution to anything, (2) there's a lot of expert concerns that the move is going to make everything worse rather than better, and (3) nobody really knows if Trump is going to go through with it, because it all depends on who talks to him, when they do it, and whether someone else sneaks into his room after they did.

The problem to be solved, of course, is that U.S. diesel prices have soared thanks to Trump's stupid war against Iran and the resulting oil crisis, with at-the-pump prices ranging from $6 to $9 a gallon or even more. That's a disaster for farmers, truckers, and rural economies in general—as well as anyone who likes to eat, y'know, food.

It's those farmers, truckers, and rural economies that make up Trump's non-wealthy MAGA base, though, so while the White House didn't give a shit about rising gasoline prices they're now in an all-out panic trying to come up with a fix for diesel prices in these last weeks before the election. So that's how we got to this point: What if we ban all exports of diesel fuel, asks the White House. Surely that would lower diesel prices because reasons?

And wouldn't have any other knock-off effects, at least none that we'd have to worry about until after election day?

[A]s high energy prices continue to bedevil Republican candidates going into tough midterm elections in less than seven weeks, Trump is inclined to announce a ban by the end of the week and consider any blowback “a December problem,” said one oil industry executive who has discussed the ban with senior White House officials.

That's Trumpism for you. Do whatever you feel like in the moment, and if it turns out you've f'ked something up beyond all redemption than that's a Future You problem, baby. Maybe Future You can blame aircraft control tower furries.

There are several problems with the plan, of course. The shortest-term one is that there aren't many good reasons to think that cutting off U.S. diesel deliveries to the rest of the world will lower diesel prices here: The current high prices are not the result of a domestic shortage. There's no diesel supplies that are being denied to the U.S. and instead delivered elsewhere, and shutting off that excess domestic production won't magically reduce the prices of what remains.

In fact, the opposite scenario is more likely:

“The blunt tool of banning diesel exports definitely doesn’t work because the U.S. exports a lot of diesel,” [Energy Secretary Chris Wright] said as part of a Climate Week panel discussion. “We’re the largest diesel exporter in the world, but that same refinery that produces diesel also produces gasoline and jet fuel. So, if you can’t export the diesel that comes out of our refineries when you run out of places to store it, and you have to reduce U.S. refining, which would put upward pressure on gasoline prices and jet fuel prices.”

At a separate event Wednesday morning, Wright suggested there would be a “voluntary” plan that would take a “slice” of diesel out of the global market.

Wright, Treasury Secretary Bessent and Interior Secretary Burgum are all opposed to the idea, reports Politico, but that hasn't been enough to kill Trump's desire for a ban because Trump does not know how anything works and prefers to use whatever "blunt tool" most reeks of "toughness" in his swiss-cheesed brain.

The White House plan, if there is one, is that by announcing a surprise ban on diesel exports, refineries will suddenly be stuck with huge quantities of diesel that they can no longer sell abroad and have to dump at fire sale prices just to keep the refinery from choking on the glut. Once the refineries have dug themselves out of that crisis, they'll quickly reduce diesel production to match the new lower demand, but since the production of jet fuel (also spiking) and gasoline (not great) can't be walled off from the diesel side of things all of that production will have to be lowered as well.

Which may mean actual gasoline and jet fuel shortages, but we're already well familiar with the Trump administration's willingness to f--k up ginormous sectors of the economy in order to do short-term favors for loyalists.

If you're looking for rough odds on whether Trump will go through with the plan, I can't give you any. But I will point out that Trump has at this point a long record of always doing the stupidest and most damaging possible thing, when presented opportunities to do so, which would seem to suggest he'll be doing this one sooner or later. At the rate things are going, he might combine it with a military invasion of Cuba just to keep us all on our toes.

Anyway, this is what I mean when I say that Trump 2.0 is basically a repeat of the Covid pandemic, at least on the economic side. Nobody can guess what's going on, and nobody can guess whether the shipment of whatever they ordered last month will actually show up. (See: European economies now hung out to dry by Saudi Arabia's announcement that, after the bombing of the East-West pipeline that bypasses the Strait of Hormuz, they will be cancelling late September and early October oil shipments to European buyers.)

The business community typically loathes uncertainty. The willingness of Wall Street to overlook all the tumult, keeping stock markets high even as more and more signs of potential collapse keep piling up, remains deeply confusing and at this point I'm going to write it off to endemic cocaine addiction in the upper classes, but even that doesn't explain it. I've also seen ample (and compelling) arguments that business leaders became so irate over the new strength of labor, post-pandemic, that they collectively decided they'd rather burn the whole economy down and institute an oligarchy rather than put up with it.

Whatever the case, this is your weekly warning of the next thing Trump and his insurrectionist polycule will likely be screwing up. When cancelling your Thanksgiving or Christmas travel plans because the economy's gone even more to hell than before, just think of it as a nod to those pandemic era times.

And no, unfortunately, there's no vaccine for Trumpism.