Last year, the coffee beans I buy from Rev Coffee in Smyrna,m GA (the best!!!!) went from about $90 to $160 for a five pound bag of whole beans from Costa Rica. Nothing about the beans changed. President Trump chose to impose tariffs. When President Trump pulled the tariff off coffee, the price went back down, though not all the way down. I think about that bag of coffee every time Washington decides it can repeal the laws of economics. Some people are whispering in the President’s ear to get him to try again.
Diesel is averaging a record $6.53 a gallon. This week, the President said, “Let’s not send out the diesel,” and Treasury Secretary Scott Bessent said the administration is examining whether a full or partial export ban would work. Sen. Chuck Grassley and a growing list of farm-state Republicans want one. Politico reports a 90-day ban is being drawn up. I understand the impulse. Farmers and truckers are getting hammered, and the midterms are six weeks away. It would still be a mistake, and the people who would pay for it are the people it is supposed to help.
Ships carry roughly 70 percent of America’s international trade by weight and more than 40 percent of it by value, which works out to well over $100 billion in goods in a typical month. Coffee, bananas, Christmas presents on the high seas at this moment headed this way, the cars rolling off ships in Los Angeles and Jacksonville, and the parts for combines and other machinery for farmers all cross the ocean to get here. Every one of those ships runs on diesel, and within 200 miles of our coast, federal rules require ultra-low-sulfur fuel, most often marine gasoil, which is diesel by another name.
The United States is the largest source of diesel on the world market. Russia, the second largest, has already banned its exports because Ukrainian drones keep setting its refineries on fire. That is a major reason prices are where they are. If we pull our barrels too, the world loses its two biggest suppliers at once, and diesel in Rotterdam, Singapore, and Shanghai skyrockets. The shipping companies will not eat that cost. They will pass it along in freight rates, and freight rates end up in the price of everything that comes off the boat. We would be copying Vladimir Putin’s energy policy and then wondering why groceries cost more.
This is why the tariffs were always a bad idea. For well over a year, foreign suppliers, importers, and domestic distributors ate part of the tariff bill rather than pass the whole price increase to customers. They did it by squeezing margins, delaying investment, and not raising wages. Tariffs are a big reason wage growth has trailed inflation. A grocery chain working on 4 or 5 percent margins does not have another cushion to absorb increased shipping costs. Companies are already stretched thin. This time the cost goes straight to the shelf, and it will impact food that comes in on container ships just as surely as on the televisions.
The ban would not even deliver the relief promised at home. Refiners do not make diesel in isolation. When they lose their export customers, they cut production, and that means less gasoline and jet fuel too, which is precisely what the American Petroleum Institute is warning. Our trading partners would retaliate. Farmers who Sen. Grassley wants to help actually ship a lot of grain overseas on bulk carriers and those carriers are suddenly more expensive to fuel. We tried price controls on oil and gasoline in the 1970s, and we got gas lines.
Unfortunately, it is Republicans pushing this — many of them the same people who spent last year insisting tariffs would not raise prices. Sen. John Cornyn is right to call it a gimmick. It is a short-term election play that cuts off our nose to spite our face, and the costs would spread far beyond the pump to every aisle of the grocery store.
The better options are already on the table. Energy Secretary Chris Wright reportedly prefers restrictions short of an outright ban, the pressure campaign against Iran is working, and zeroing out the remaining tariffs would lower prices faster than anything Congress can pass before November. President Trump took the tariffs off coffee, beef, and bananas, and prices fell. He needs to remember those lessons now and not try to take an easy path that costs us more.
