US President Donald Trump has reignited tensions between Washington and Beijing, warning that his administration could halt cooking oil imports from China.
The move, framed as retaliation for Beijing’s refusal to buy American soybeans, has raised fears of renewed disruption to the global agricultural trade and rattled financial markets that had only just begun to stabilise.
Bloomberg reports that Trump described China’s decision to avoid US soybeans as an “economically hostile act,” accusing Beijing of deliberately harming American farmers.
Posting on social media, he said the US could “easily produce cooking oil ourselves” and therefore “doesn’t need to purchase it from China.”
His remarks quickly rippled across markets, sending the S&P 500 lower and reigniting investor concerns over a possible trade war.
Market reaction and impact on global traders
According to Bloomberg, shares of Bunge Global SA and Archer-Daniels-Midland Co., two of the world’s biggest oilseed processors, rose sharply after Trump’s announcement, reversing earlier declines.
The broader stock market, however, dipped as investors assessed the potential fallout from escalating trade tensions between the world’s two largest economies.
The issue of used cooking oil (UCO) has become particularly contentious in recent years. Imports from China surged to record levels in 2024, as American biofuel producers used the cheaper foreign supply to make renewable diesel.
This raised concerns among domestic soybean farmers, who argued that the influx of Chinese imports undercut demand for their crops.
Renewed focus on renewable fuel policies
The Biden administration had previously sought to limit the flood of imported UCO by making foreign supplies ineligible for a key tax credit, aiming to support local producers.
Trump, returning to the White House, has doubled down on this approach, proposing new curbs to discourage reliance on Chinese imports.
His position has received backing from the American Soybean Association and other farm groups, who say that Chinese policies have worsened price pressures for US growers.
Farmers, already grappling with low crop prices and a sluggish export market, are now facing uncertainty about government aid packages.
Plans to compensate them for trade-related losses have been delayed due to the ongoing government shutdown. Many in the agriculture sector, however, maintain that they prefer long-term trade stability with China over short-term financial assistance.
Trade talks and tariff uncertainty
Earlier in the day, US Trade Representative Jamieson Greer had expressed optimism that discussions between Washington and Beijing were progressing, saying senior officials held talks and that Trump and Chinese President Xi Jinping still plan to meet later this month.
Bloomberg notes that Trump echoed that sentiment, telling reporters that while the relationship with China was “fair,” it could still go either way.
But later remarks about cooking oil and tariffs quickly reversed that optimism. Trump has also threatened a 100% tariff on Chinese goods by 1 November, depending on Beijing’s next move.
The two countries had earlier agreed to keep tariffs lower in exchange for maintaining the flow of rare earth minerals and semiconductor materials. That truce, however, is set to expire on 10 November.
As both nations position themselves ahead of new trade negotiations, the possibility of another major economic clash looms large—one that could once again test global markets and supply chains already strained by years of tariff disputes.
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