The measure allows the deferral of federal tax payments on diesel used for road transport between 5 October and 31 December 2026, without interest or penalties, provided that the legal requirements are met.
So-called red-dyed diesel is chemically similar to conventional diesel but is coloured red to identify fuel that receives different tax treatment and, under normal conditions, cannot be used in vehicles travelling on public roads.
The White House says the measure could reduce costs for truck drivers, farmers and businesses that depend heavily on diesel.
According to the US administration, the federal tax on the fuel stands at 24.4 cents per gallon, meaning the measure could generate significant savings for large-volume users.
Trump announced the decision during a visit to Grand Island, Nebraska, where he said the temporary relaxation could provide substantial savings for farmers and transport operators at a time when diesel prices remain high.
The decision comes amid continued pressure on the US fuel market, with high prices, constraints in international supply and disruptions affecting the energy sector.
The executive order also directs the Treasury, Agriculture and Transportation departments to facilitate implementation of the measure and help ensure access to the fuel in regions and sectors that rely heavily on diesel.
Despite the administration’s aim of reducing costs, some analysts argue that the measure may have only a limited effect on final pump prices because it mainly targets taxation and does not directly increase the amount of fuel available on the market.
The initiative comes just weeks before the US midterm elections scheduled for 3 November, at a time when fuel and food costs remain major economic concerns for voters.
The temporary measure is expected to remain in force until the end of 2026.