US President Donald Trump said he might stop trade in cooking oil with China, injecting fresh tensions into the relationship between the world’s two largest economies.
Trump on Tuesday cast the potential move as retaliation against Beijing for its refusal to buy American soybeans, which he said ‘is an Economically Hostile Act’ that is purposefully ‘causing difficulty for our Soybean Farmers.’
‘We are considering terminating business with China having to do with Cooking Oil, and other elements of Trade, as retribution. As an example, we can easily produce Cooking Oil ourselves, we don’t need to purchase it from China,’ Trump posted on social media.
The benchmark S and P 500 turned negative as Trump’s comments re-escalated the conflict with China. Just hours earlier, both Trump and US Trade Representative Jamieson Greer expressed confidence that friction would ease through ongoing trade talks. Shares of Bunge Global SA, the world’s biggest oilseed processor, and rival crop trader Archer-Daniels-Midland Co. jumped on the news, erasing earlier declines.
So-called used cooking oil, or UCO, became a flashpoint in the US last year with imports used to make renewable diesel fuel raising concerns that American soy farmers were missing out on demand. Trump’s administration was already moving to reduce incentives to bring in foreign supplies, after a flood of cheap cooking oil from China reached US shores. Imports from the Asian nation reached a record high in 2024, according to the Agriculture Department.
Trump’s comments come as farmers have been suffering from low crop prices and China’s avoidance of US soybeans. The Trump administration has vowed to ease growers’ pain with an aid package, though that has been stalled by the government shutdown. Still, many farmers have stressed that they would prefer a trade deal with China over a handout.
Tuesday’s events exemplified the whiplash that has characterized the US-China relationship since Trump’s return to the White House, which has kept investors anxious about the eruption of a full-blown trade war.
Greer had buoyed hopes that tariff negotiations with the Chinese government remained on the table, saying that unnamed senior-level officials from Washington and Beijing held discussions Monday and that Trump and Chinese President Xi Jinping still have a ‘scheduled time’ to meet later this month.
Trump, too, sounded cautiously optimistic a positive outcome could be reached.
‘We have a fair relationship with China, and I think it’ll be fine. And if it’s not, that’s OK too,’ Trump told reporters earlier Tuesday at the White House. ‘We have a lot of punches being thrown, and we’ve been very successful.’
That had soothed worries that were inflamed when Beijing sanctioned the US units of a South Korean shipping giant and threatened further retaliations against the industry, the latest tit-for-tat retaliation between the two sides.
Both nations have sought to build leverage ahead of new trade negotiations by slapping new restrictions on shipments of rare-earth-minerals and semiconductors-materials that lie at the heart of their trade conflict. In response to recent Chinese measures, Trump threatened to impose an additional 100 percent tariff on goods from China by November 1 and raised the prospect of canceling his meeting with Xi at the Asia-Pacific Economic Cooperation summit in South Korea.
‘Whether it’ll go through or not, I don’t want to pre-commit either ourselves or the Chinese, but I think it makes sense for people to talk when they can,’ Greer said of the meeting.
Whether the 100 percent tariff goes into effect ‘depends a lot on what the Chinese do,’ Greer said. The US and China earlier this year reached a truce on tariffs after escalation between the two saw US levies on Chinese goods surge to as high as 145 percent. The latest extension is set to expire November 10.
‘Our agreement was we’re going to keep our tariffs low if you keep the rare earths flowing, they’re now saying that they’re going to control more rare earths and downstream products. And so it makes sense that, you know, we can raise our tariffs,’ he said.