An embargo is not a policy — it is a confession

Senator Chuck Grassley of Iowa has written to President Trump urging a diesel export embargo to relieve high domestic fuel prices, according to The Hill. He invokes the 1970s precedents — agricultural embargoes that presidents used to hold down home prices by keeping supply in-country. The comparison is instructive, but not in the way Grassley intends. Those 1970s embargoes did not solve the underlying problem; they distorted markets, damaged American credibility as a reliable commercial partner, and planted the seeds of the supply-chain chaos that followed.

I understand the pressure. Diesel is not a luxury. It moves the freight, runs the farms, powers the construction sites. When diesel prices rise, the cost fans out across every industry that touches the physical economy. The people Grassley represents feel it directly, and a senator who ignores that is not doing his job. The grievance is real. The proposed remedy, however, mistakes the effect for the cause.

An export embargo is a price control in disguise. It works by stranding American-refined product inside American borders, temporarily depressing domestic prices by creating an artificial surplus — while simultaneously telling every foreign buyer and every future investor in American refining capacity that the United States government may, on political impulse, lock them out of what they paid to depend on. That reputation, once lost, is expensive to recover. Public credit among trading partners operates by the same logic as public credit among bondholders: reliability commands a premium; unreliability pays a penalty, forever.

The correct diagnosis, I would argue by inference from first principles, is a supply and refining capacity question, not a trade question. American refining capacity has been constrained for decades — by regulatory friction, by capital reluctance, by the general political hostility to fossil-fuel infrastructure investment. If the nation wishes cheaper diesel at home, the energetic path is to expand domestic production and refining, not to garrison the commodity behind an embargo wall. The former builds productive power; the latter merely redistributes scarcity.

I confess I cannot speak with authority to the precise mechanics of today's futures markets, pipeline tariffs, or the engineering of modern refinery operations — those are instruments of a complexity I could not have known. But I know what commerce requires: predictability, open channels, and a government that intervenes in markets to correct structural failures, not to paper over price signals that are telling producers exactly what the market needs them to know.

My recommendation is this: if the executive wishes to act on diesel prices, let it do so by removing the regulatory barriers that suppress new refining investment, by deploying the strategic petroleum reserve with discipline and a clear replenishment plan, and by coordinating with allies on supply — not by throwing an embargo wall around American exports and calling it relief. The embargo is the easy answer. Easy answers in commerce, as in war, tend to be the most expensive ones in the end.