If America wants to conserve fuel, why don't they use diesel in their cars and especially their large SUVs?

Yes it sounds good but it seems to be a political issue and the cost of diesel and price of the vehicle over a gas one is a lot more. Many are turned off from diesels because of the late 1970s to early 80s GM 350 engines converted to diesel which were pure junk !

Diesel engines are not an easy sell in the US. US consumers aren't too keen on the diesel engine rattle, the relative lack of horsepower, the possible issues in sub-freezing weather and the higher purchase cost.

Emissions from diesel powerplants are still decidedly more harmful than those from modern gasoline engines. Manufacturers much devote considerable research and development into meeting US emissions standards.

Diesels never really caught on in the US due to the diesel price often being higher for a gallon compared to a gallon of gas as well as the lack of availability at a lot of stations.

Another thing people remember is the smoke-belching diesels of the 70's and 80's as well as GM/Oldsmobile disastrous diesel engine offered first in the late 70's.

The current VW diesel emission fiasco is definitely not helping either...

Ask VW about the environmental standards for diesel in the US. As for fuel economy, the US has definitely embraced hybrid systems. The Prius has twice the in-town fuel economy of the Cruze diesel and more than 10 mpg better on the highway.