The reality is it's bad idea that is going to put you into trouble if you tried it in most states as it's not like the federal government can cancel out the state's taxes and enforcement through executive order.
As Trump said at his rally, he didn't actually know what red dye diesel is anyway.
https://subscriber.politicopro.com/article/2026/06/treasury-...
It does make Trump look weak, doing something, anything, to keep Republican Majority in Congress, and having no foreign policy principles. It also confirms something we've known since Trump's first impeachment, that he runs foreign policy for his own benefit/enrichment.
I don't see how this can be defended.