Trump Russia Capitulation: Stupid, Corrupt, or Vindictive? Why Not All of the Above?
Are you struggling to make sense of President Trump's series of moves to lift sanctions on and import diesel fuel from Russia? The reported reason for the diesel move is that Americans, including key Republican constituencies, are very unhappy with the price of diesel fuel, but every analysis I've seen indicates that adding Russian diesel to the supply will have at most a small marginal impact on price. And indeed, the price of diesel in the U.S. dropped by only about $0.02 per gallon on Trump's announcement, which is hardly surprising given that diesel fuel is sold on a global market. Russia will divert to the U.S. market some diesel fuel it otherwise would have sold to China and other countries that were not applying sanctions, but that doesn't eliminate the demand from those countries, so the net effect on global prices and thus U.S. prices is very small. In light of the very limited impact on diesel prices, one might wonder what Trump is doing. Why give Putin sancti...