A historic economic meltdown appears to be percolating. As the price of diesel spikes, that is going to put pressure on the cost of just about everything else. And considering the fact that Canada is our largest trade partner, slapping a 50 percent tariff on all Canadian goods is not going to help our cost of living crisis either. Meanwhile, the U.S. economy is bleeding jobs and the number of Americans that are filing for bankruptcy has risen to a very frightening level. It is starting to look a lot like 2008 all over again, and that is not a good thing at all.
If you use diesel fuel, you have already noticed that it has been getting a lot more expensive.
At this point, the national average for diesel is hovering around five and a half dollars a gallon…
As August 2026 rolls on, persistent price hikes are delivering a real wallet punch to truck owners, RVers, contractors, and heavy-fleet operators across the country. According to the latest fuel tracking data from AAA as of August 18, 2026, the U.S. national average retail diesel price has climbed to a staggering $5.4677 per gallon.
That’s nearly a 15-cent jump in just one week, nearly 38 cents higher than last month, and a painful leap from the ~$3.69 per gallon we saw this time last year. For anyone relying on diesel to tow, haul freight, or earn a living, filling up is getting genuinely tough on the bottom line.
Of course there are some states where diesel is far more expensive than the national average.
In California, the average price of a gallon of diesel just reached seven dollars…
Diesel prices in California hit $7 per gallon again Wednesday as the wars in Eastern Europe and the Middle East knock out refineries, triggering a fuel supply crunch around the world.
Truckers in the Golden State are shelling out about 30 cents more per gallon than they paid a month ago, according to data from AAA. Prices have surged about 37%, or $1.89 per gallon, compared to the same period last year.
This is a really big deal, because our economy runs on diesel.
According to one industry expert that was just interviewed by CNBC, diesel is “the important macro fuel to watch”…
Diesel is the most important fuel for the global economy, said Bob McNally, president of Rapidan Energy. It is used “in transportation, it’s in heating fuel, it’s in agriculture, it’s in industrial uses,” McNally told CNBC’s “Squawk on the Street” on Monday. “It is the important macro fuel to watch,” he said.
Approximately 76 percent of all commercial trucks use diesel fuel.
Just think about that.
As diesel continues to become more expensive, this is going to have a devastating impact on our trucking industry…
Rising costs for the fuel affect all modes of transportation, from airlines to trucking, and the ripple effect will impact “virtually all industries,” said Joel Sutherland, a professor of supply-chain management at the University of San Diego’s Knauss School of Business.
For trucking, the consequences could be particularly disastrous. Some 90% of U.S. licensed common carriers operate 10 or fewer trucks, and most are struggling to stay afloat, Sutherland said.
Some trucking companies have ceased doing business, and many more will likely fail if high fuel costs do not subside soon. That could cause U.S. trucking capacity to decline, making it even more expensive to transport goods around the country.
So why is this happening?
You can blame the wars in the Middle East and Europe.
Traffic through the Strait of Hormuz is way below pre-war levels, and the Russians have banned the export of diesel due to drone attacks on their refineries…
Diesel prices are rising as the wars in the Ukraine and Iran wars have disrupted about 8% of the supply needed to meet 28 million barrels per day of global demand, Lipow said.
Ukrainian drone attacks on Russian refineries have forced Moscow to ban diesel exports of around 800,000 bpd, Lipow added.
The disruption in the Strait of Hormuz has affected about 1.2 million bpd of Middle East diesel exports, the analyst said. Iran’s Houthi allies in Yemen recently attacked Saudi Arabia’s Red Sea refinery in Jizan, shutting the facility and its 200,000 bpd of capacity at least until the end of August, he said.
Meanwhile, a trade war has just erupted with our largest trading partner.
The U.S. will now be imposing a 50 percent tariff on all Canadian goods, and the Canadians will be responding in kind…
In his first public comments since negotiations collapsed on Friday in Washington, the US president wrote on social media: “Canada wants the benefits of being a State, without being one!!!”
“They have also charged our great farmers, for many years, massive amounts of tariffs,” he added. “No more!!!”
His comments came after the US imposed 50% tariffs on $20bn (£14.6bn) worth of Canadian goods, while Mark Carney, the country’s prime minister, has vowed to match them “dollar for dollar”.
Yes, this is really going to hurt.
Canadian Prime Minister Mark Carney is insisting that the United States “asked too much and offered too little”…
Prime Minister Mark Carney told his negotiators to walk away from the table after the Trump administration introduced late unacceptable demands on culture, autos and sovereignty that, when taken in concert with their overall approach to talks, revealed the U.S. was not interested in a “true economic partnership” with Canada.
In a departure from his usual diplomatic language, Carney suggested the U.S. sometimes signs trade deals in “pencil,” and while Canada’s government is united and working together, the same is not true of the Trump administration.
“We cannot accept what they’ve offered, and we will not give what they’ve asked,” Carney said on Saturday in Ottawa, adding that the United States ‘asked too much and offered too little.’
We certainly don’t need a trade war with our largest trading partner, because lots of economic red flags have already been popping up all around us.
For example, last week Walmart reported its slowest U.S. sales growth in more than six years. As a result, the stock price absolutely plummeted.
And the fact that the U.S. economy lost 23,000 jobs last month certainly has a lot of investors on edge.
But those numbers will be quickly forgotten.
What will not be forgotten is the horrific cost of living crisis that has been going on since the beginning of this decade.
One recent survey discovered that Americans believe that it is the greatest challenge that they are currently facing…
According to a Statista Consumer Insights survey conducted between January and July 2026, 53 percent of U.S. adults said that the high cost of living was one of the biggest challenges they currently face – making it by far the most common answer ahead of mental and physical health at 26 percent each.
Needless to say, the rising price of diesel and our trade war with Canada are only going to make our seemingly endless cost of living crisis even worse.
As our standard of living declines, the number of Americans filing for bankruptcy just keeps going up…
The number of Americans who file for bankruptcy is growing. More than 500,000 people took this step in 2025, nearly 50% more than in 2022. And the numbers have kept on climbing, with a 12% jump in June 2026 from a year earlier as many consumers struggled to pay their bills.
At this point, most of the population is living right on the edge, and more people are falling out of the middle class with each passing day.
For more than a decade, I have been ranting about the death of the middle class.
But I don’t feel like all of that ranting has done much good, because the erosion of the middle class just continues to accelerate.
There is no way that America can be strong without a strong middle class.
Unfortunately, we are now heading into an economic storm of epic proportions, and what we experienced back in 2008 will look like a picnic in comparison.
Michael’s new book entitled “10 Prophetic Events That Are Coming Next” is available in paperback and for the Kindle on Amazon.com, and you can subscribe to his Substack newsletter at michaeltsnyder.substack.com.
About the Author: Michael Snyder’s new book entitled “10 Prophetic Events That Are Coming Next” is available in paperback and for the Kindle on Amazon.com. He has also written nine other books that are available on Amazon.com including “Chaos”, “End Times”, “7 Year Apocalypse”, “Lost Prophecies Of The Future Of America”, “The Beginning Of The End”, and “Living A Life That Really Matters”. When you purchase any of Michael’s books you help to support the work that he is doing. You can also get his articles by email as soon as he publishes them by subscribing to his Substack newsletter. Michael has published thousands of articles on The Economic Collapse Blog, End Of The American Dream and The Most Important News, and he always freely and happily allows others to republish those articles on their own websites. These are such troubled times, and people need hope. John 3:16 tells us about the hope that God has given us through Jesus Christ: “For God so loved the world, that he gave his only begotten Son, that whosoever believeth in him should not perish, but have everlasting life.” If you have not already done so, we strongly urge you to invite Jesus Christ to be your Lord and Savior today.
The post The Price Of Diesel Hits 7 Dollars A Gallon In California And A Massive Trade War Just Erupted Between The U.S. And Canada appeared first on The Economic Collapse.
