Marketplace - Time for a diesel export ban?

Episode Date: September 22, 2026

Diesel costs have nearly doubled over the last year, breaking record highs. In fact, some lawmakers are calling on the Trump administration to halt all diesel exports until they cool off. But experts say it's a recipe for price chaos that will leave us right back where we started. Also in this episode: A wide crude oil spread persists, butter and cheese become a bright spot on grocery receipts, and local bank consolidations leave customers frustrated.Every story has an economic angle. Want some in your inbox? Subscribe to our daily or weekly newsletter.Marketplace is more than a radio show. Check out our original reporting and financial literacy content at marketplace.org — and consider making an investment in our future.Read the stories in today’s episode:The difference between the "paper" price of Brent crude and what refiners pay for itTrump and Xi meet this week. What can we expect?As grocery prices rise, cheese and butter get cheaper"Not such a good idea": How banning diesel exports to lower prices could backfireAs banks consolidate, some customers aren’t so sure they’re happy

Coming up today on the program, be very careful what you wish for. From American Public Media. This is Marketplace. In Los Angeles, I'm Kai Rizdahl. Tuesday today, the 22nd of September. Good as it always is to have you along, everybody. We're going to begin today with a story from the file I keep on my computer labeled. Are you really sure you want to do that?

Depending on which official in the Trump administration you listen to, We are either looking at a temporary ban on exports of diesel fuel. That was Treasury Secretary Scott Besson today, or calling for a ban that was the president at the United Nations today. Various and sundry senators and governors have said essentially the same thing, trying to get the government to do something to bring diesel down off its record highs, $6.52 a gallon today on average, says AAA. This, though, is where I should probably tell you

that the subheading on that computer file is, Good examples of the law of unintended consequences. Here's Marketplace's Samantha Fields. When Sarah Dane last bought diesel for her farm equipment back in July, she paid $3.60 a gallon. Which was still a little over a dollar more than I paid a year before that. Dane owns fresh-hopped farm, about 700 acres in eastern Montana. We grow corn, soybeans, and wheat with some alfalfa.

She's already harvested the wheat for the season, which took about 1,000 gallons of diesel. Now it's time to fill up her tanks again. I got my prices this morning, and regular diesel is 614, and the dyed diesel that goes in the tractors is 560. So if I fill both of my tanks, which are both currently empty, it will cost me $11,740 as of this morning. That strain on farmers is why some officials are calling for a ban on diesel exports. Sounds like a fairly easy thing to do that would maybe increase the,

supply of domestic diesel. But Hugh Daigle at the University of Texas at Austin says, while it might reduce prices temporarily, in the long term, it's probably not such a great idea. Diesel is a global market. And Bob McNally at Rapidan Energy Group says if you were to pull U.S. exports out of that market, you would see global prices for diesel skyrocket. That would immediately push prices up on the East and West Coast, where most diesel is imported. Even though the U.S. produces plenty, there's no growth. way to transport it across the country. Now, for a brief period of time, the pump price in Texas and Louisiana and some of the Midwestern states would collapse. But McNally says oil refiners would then see their profits

collapse too. And in response to that, refiners will reduce their production. Which would then push prices back up. I'm Samantha Fields for Marketplace. Consequences of the unintended kind. And in lower Manhattan today, the corner of Wall Street and Broad, not a whole lot of equity enthusiasm. Bonds held pretty much steady. Oil down again, we will have the details when we do the numbers. The big economic event of the week is Chinese President Xi Jinping's state visit. Artificial intelligence is, of course, going to get all the headlines. The war in the Middle East and its associated issues, we'll get some agenda time, too. But as always, it would be a very a big mistake to sleep on the trade relationship between the two biggest economies on the planet.

So we have called Chad Bown. He's a senior fellow at the Peterson Institute of International Economics to get some insights. Chad, it's good to have you on. Thanks for having me. Give me a general sense, would you chat, of the state of play right now trade-wise between these two countries? Not good. I mean, in a sense, things have stabilized. So things got really, really bad in 2025, obviously with the United States imposing massive tariffs on China, China responding with tariffs of their own, imposing export restrictions. Trade really plummeted. But since the meeting last year and then, especially given the Supreme Court decision in February, that forced the Trump administration to replace a lot of those 2025 tariffs, trade has leveled off

both U.S. exports to China and U.S. imports from China just at a much, much lower level. than things were before the President Trump came along again. Yeah, so flat is the new good here? Is that what we're saying? Yeah, things aren't getting worse, which is the new good. Okay, fair enough. I'm looking here on my computer in the studio at a handy-dandy dashboard. Six updates on U.S.-China trade for the Trump's Washington Summit, Chad Bound, Reginald Jones, senior fellow, Peterson Institute. I'm interested in number two here.

Trump's next tariffs could drive companies back to China. The president, as we all know, is threatening new tariffs pretty much every other day. The point of the original tariffs was to bring back some of the U.S. supply chain. And now you're saying maybe if he does more tariffs, it'll drive things back to China? Yeah. So for a lot of products, I think we have to be realistic that the next best supplier is not going to be the United States. You know, so if you're talking about maybe some assembly of clothing or consumer electronics, it's not going to be the United States, it's going to be somewhere else in the world. So what then really matters is how high

the endgame tariffs are that President Trump imposes on China relative to that next best alternative, that alternative source. And the challenge at the moment is China really is holding all the cards when it comes to the Trump administration. These export restrictions on products like rare earths and permanent magnets, these are goods that are essential to the American economy. China produces virtually all of the world supply of these things, and threatening to cut Americans off really would be devastating. That threat has really limited the size of the tariffs that President Trump can impose on China. But President Trump loves tariffs. And so he really can't hold himself back when it comes to imposing tariffs on other countries. So the real worry is if he becomes

constrained against China, the tariffs don't go up there, but the tariffs do creep up against all the rest of the countries in the world, then some of the companies that had moved their supply chains out of China in the first place may decide, hey, China's actually getting lower tariffs than these other places and they have a really efficient economy. They've got great infrastructure. Let's move back our sourcing to China. You used the president's favorite phrase there the other sentence or two ago. You said China has all the cards. The Chinese know that, right? They absolutely know that. And, you know, they're using it. And that's why they're not really giving much at all in these last few summits. Back in May, you know, the best that

President Trump got out of President Xi was a promise to buy a few more American airplanes. So Boeing, maybe some more soybeans. You look at the data. Yeah, there's maybe a little bit more, but not a whole heck of a lot, right? And this time around, I think it's going to be more of the same. There's just not much that we should expect to come out of this summit. That's a little depressing, Chad. It is. It's not a great state. There are a lot of problems out there in the world. It would be great if the United States had some leverage to induce, incentivize China to make some changes. But that's not where we are today, unfortunately. So let's say you could get Treasury Secretary Scott Besson, who's been heavily involved in these negotiations or James and Greer, the trade representative,

let's say you could get them on the phone. What would your counsel be to sort of maximize, you know, the U.S. results or maybe, you know, minimize the losses? The real big thing is the United States can do to tackle the problem to help take away some of this leverage that China has really probably don't involve engaging with China. It's two things. It's, you know, maybe some industrial policy, so finding alternative sources of supply where possible for rare earths critical minerals in the United States. And they have done some of that. We're now subsidizing companies to do that sort of activity here, but also to work with

other like-minded countries that are facing the very same problems with China. Some of these other countries may be better positioned to more quickly and more cheaply help us create these alternative sources of supply, countries like Australia, Japan, Canada, even, Europe. But the challenge at the moment often is President Trump doesn't see it that way, and instead he's threatening those countries with tariffs of their own. Chad Bound, he's at the Peterson Institute for International Economics. He's also got a book out you should read with Samaya Keynes. It's called How to Win a Trade War. Chad, thanks a lot. I appreciate your time. Thanks for having me.

The national debt, as you have surely heard, topped $40 trillion last month. An enormous amount of money, yes, almost incomprehensible, but as so often happens with big headline numbers, there's more to it than just that headline. Total U.S. debt is comprised of two parts. Livia Mitchell is a professor of business, economics, and public policy at Wharton. Debt part one? Debt held by the public. Debt held by the public is all the money the government owes its bondholders. That's U.S. citizens, foreign governments, big pension funds, also banks. and as of the end of last week, it totaled $32,401,900, and I could go on, but I will not. Dollars. The total federal debt includes all of that.

Plus intergovernmental holdings. So it's money that one part of the federal government owes to another part of the government. And that comes to about $7.7 trillion. Well, they're mainly the holdings of the trust funds, primarily Social Security and Medicare. Eugene Stirley is the co-founder of the Urban Brookings Tax Policy Center. For years, those trust funds held a modest surplus. They especially grew in years in which the baby boomers were in the workforce and had yet retired. Excess cash is great, right? That modest surplus. But if you have it, you're going to want to learn, you're going to want to earn a little

interest on it, yes? So the excess cash was transferred to the Treasury. In return, the social Security Trust Funds got special issue treasury securities. Those special issue treasury securities are an asset on the Social Security Trust Fund's books, their reliability on the Treasury Department's books, because they will eventually have to be paid back in full. Point of fact, there's a file drawer in West Virginia that holds trillions of dollars of this special issue bonds. All right.

Honestly, that file drawer? I have a picture of it. It's probably electronic now. We'll save that story for another day. But the point is, the Bureau of Fiscal Service in the Treasury Department, keeps records of every penny, literally every single penny that one part of the government owes another. And that $7.7 trillion includes governmental loans, intra-governmental loans, rather, for military pensions.

The Highway Trust Fund is in there as well, a bunch of others. But Social Security and Medicare are by far the biggest. and with more Americans retiring and starting to draw down on them? Those trust funds are being depleted. Those assets are being sold. Metaphorically? The filed cabinet will be empty in 2032. Which means the Treasury Department's going to have to rely even more on debt sold to investors outside the government to keep on paying our bills.

And that, as those rising government bond deals that we keep on telling you about, is getting more and more expensive. Well, I know it doesn't feel like it, food prices being what they are, but there are some things in your pantry and refrigerator that are getting cheaper. The Economic Research Service, that's part of the Department of Agriculture, is out with its regular livestock, dairy, and poultry outlook. And it says there's some solace to be found in the dairy aisle. Marketplaces Caitlin Tan has more. Ben Lane says he's always thinking about dairy. He's an analyst for Terrain Ag, and he has a conference tomorrow.

It's a dairy nerds. And for the dairy nerds, lower cheese and butter prices are not surprising. But when I hear people in the grocery store talking about butter being reasonably priced, I think that's a good sign to me that's reaching the consumer. Prices always come down to supply and demand, but in this case, it's more on the supply side. That's according to Kara Murphy with high ground dairy. It's just we have so much. We just have too much butter. Same with cheese. Murphy says lately our dairy cows have been producing more, and a handful of new cheese production plants recently opened in the Midwest.

Plus, one of the main buyers is having a hard year. The food service sector is not doing very well, and that sector uses a significant amount of cheese. People aren't going out for a cheeseburger or cheese pizza as much, and since unused dairy products have a limited shelf life, literally, they might end up at your neighborhood grocer on sale. There's a gas station in Wisconsin that if you can get the 90s 9 cent bar, it's always the talk of the town. Kathleen Noble-Wolfly is with the analytics company Everag. She admits four sticks of butter under a dollar is an unusual deal, but she expects butter and cheese prices across the country to be relatively low for a while.

That's partly because of a food trend that on the surface doesn't seem to have anything to do with dairy. The protein craze absolutely plays into some of the dairy dynamics today. That giant tub of chocolate protein powder likely contains Wei, which historically was just a byproduct of cheese making. But here in 20206, it's looking more like Way is the big driver. Bottom line, the cheese for your holiday casserole or butter for your apple pie will probably be a little cheaper this year. I'm Caitlin Tan for Marketplace. Coming up. The tech is better. The app is better. The website's better. What more do you need, huh? First though, let's do the numbers. Down Dostro's down 185. Today, more than 310%. 51,000,

863. The NASDAQ up 122 points, 410%. 27,244. As in P 500, basically flat 7764. AutoZone reported fourth quarter earnings today, while the company missed sales expectations. Sales did still reach $6.6 billion, five percent higher than last year. Thus, shares accelerated three and a quarter percent. Staying with cars and car parts, O'Reilly Automotive, saw shares increase three and a half percent, advanced auto parts, up four percent on the day. Bond prices went up, and when that happens, yield to go down.

The yield on the 10-year treasure note, dip to four. 4.95% and you are listening to Marketplace. This is Marketplace. I'm Kai Risdahl. Oil, as I said, real quick, up at the top of the program, it fell again today. Brent Crew, the global benchmark, $98 a barrel and change. West Texas intermediate, right around 90 a barrel. Cheaper than it was earlier this month, but still very much not cheap. Thing is, though, that that 90 bucks, that's a paper price. What a buyer is agreeing to pay for in today's trading, November delivery, the front month, it's called. It's not what a refiner in, I don't know, Asia is paying for crude today.

And that price, as Marketplace's Elizabeth Roval tells us, could be a whole lot higher. There are so many different crude oils and prices. Tom Seng with Texas Christian University says, of course, you've got your West Texas Intermediate, your Brent. There's OPEC selling price, Mexico, India. There's even a crude price called Mars. So Mars is actually an offshore platform in the Gulf of Mexico. But lately, something unusual has been happening with Europe's benchmark crude oil, Brent, says Joe DeLora with Robbo Bank. The current state of unreality between futures prices for oil and physical prices for oil is just blowing my mind.

We now have a $26 spread again between Brent Physical and Brent Futures. That's a big gap between the price being paid for Brent Futures, the financial world's price of oil, versus what people are actually paying to get physical delivery of a barrel of oil. We just keep talking about futures. Like, oh, futures are down $4 today. Okay, who cares? Well, futures don't mean anything. Physical oil means everything. And because of the Iran war, the physical market is tight. Dan Pickering is with Pickering Energy Partners. Physical buyers are dealing with barrels available soon right now, a specific point in time. And those two markets, financial versus physical, can diverge and Habdberg. And while energy market chaos may not be good for consumers, farmers, or shippers, there are some winners, says Mark Finley, with Rice University. Trading houses that thrive on volatile markets, they're in their element right now.

On the other hand, Finley says that large oil companies making long-term investment decisions can't afford to chase up and down the price of oil. I'm Elizabeth Troval for Marketplace. Should you miss something on the actual radio, we get it. We understand. Life is busy. Good thing then, but we've got a podcast. You can get at Marketplace.org or wherever you subscribe to your podcast. Just follow us. In 1986, there were about 18,000 banks in this country, just 40 years ago. Today, just over 4,200 banks. The word you're looking for here is consolidation. And over the past couple of

years, that has been intensifying. Higher interest rates help banks make more money. And one of the things banks do when they make more money is often buy other banks. That can help banks cut their costs and modernize their technology, pulling more deposits, too, do better business. But it changes things for consumers, too. Marketplace of Justin Ho reports. There's a sandwich shop in Baltimore called Echibet. And for about five years or so, its owner, Steve Chu, banked with a small local financial institution.

Last year, that bank was purchased by a bigger, regional one. Chew says in a lot of ways, things have improved. One of our grips with a smaller bank was, like, the online platform's terrible. The website's horrible. But now that they got purchased, the tech is better, the app is better, the website's better. On the other hand, Chu says the new bank feels less personal. For instance, he says if he wanted to get a loan at his old bank, he could just pick up the phone and call one person. And they could kind of fast track us and navigate us through the bank bureaucracy.

But now what we're finding out is we just run into that bureaucracy more and more and makes banking a lot less smooth. That loss of a personal relationship to a banker has real effects on small businesses. It's become more difficult for them to access capital. That's Matt Hedrick. He's the president of Harmony Group, an accounting and advisory firm. He says at a smaller bank, even if he's had a bad year, you're able to tell them, hey, this is what's going on. Here's how we're rectifying it. And here's some results you can see and just talk about it. And they understand that, hey, the loan's not one that we have to think of as troubled. Hedrick says about 30 to 40 of his clients, mostly restaurants, have been through bank mergers and wound up doing business at much larger financial institutions.

For our clients, what will happen a lot of times is you lose the one banker that you've built a relationship with, you'll get introduced to a new one, but that person doesn't check in as often. They don't know about you, so they're not as willing to lend to you. Bank mergers can also mean higher fees for small businesses, says Jeremy Kress, a professor of business law at the University of Michigan. So even if the bank is answering the phone when you call, if you're not paying attention to the fine print, you may be getting worse terms than you thought when you signed up. Press says there are also consequences for the bank's local community. Small banks reinvest locally. Big banks, not so much. I live in Ann Arbor, Michigan. If my local bank is acquired by a New York City bank, we can expect that that New York bank will divert the deposits from Michigan to lending. in New York. Some small bankers are using this moment to try to win over new customers. Robert James

second runs Carver Financial Corporation, which owns banks in Birmingham, Alabama, and Savannah, Georgia, where it's now the only locally owned bank in the city. There was one other bank that was a locally owned bank. And a little over a year ago, they got acquired by a bigger regional bank. And then that bank got acquired within less than a year. James says his bank's been stepping up its marketing on social media at local events and with local business groups. Emphasizing that we're the only locally owned bank in the market, we're the only place where you know for sure that all the decisions are being made locally. James says the bank has been able to convince some new customers to deposit money. And he says one day he hopes to be able to show them

the results of that decision. Because we'll be able to show that, you know, keeping your money local is improving your community and improving, you know, access to capital for people here in the local market. And so far, James says those new deposits are helping the bank get more loans out into the community. I'm Justin Howe for Marketplace. This final note on the way out, I don't know if you heard or saw the president's speech to the United Nations today. It was something, the geopolitical details of which will be widely reported elsewhere. I did just want to note, though, that even though the president also said he is in that speech, he's going to rebrand artificial intelligence to super intelligence. That's true. He actually said that. And he also said that change will be

reflected in all government documents. On this program, it's going to stay AI. Jordan Manjee, Zaniel Maharaz, Janet Wynn, Oga Oxman, and Virginia K. Smith are the digital team. I'm Kai Rizdahl. We will see tomorrow, everybody. This is 8 p.m.