Trump threatens to halt cooking oil trade with china amid renewed tensions

U.S. President Donald Trump has warned he may suspend trade in cooking oil with China, reigniting tensions between the world’s two largest economies. Speaking on Tuesday, Trump described Beijing’s refusal to buy American soybeans as an “economically hostile act” and vowed to retaliate to protect U.S. farmers.

“We are considering terminating business with China having to do with cooking oil, and other elements of trade, as retribution,” Trump wrote on social media, adding that the U.S. could “easily produce cooking oil ourselves.” The announcement immediately unsettled markets, pushing the S&P 500 into negative territory after early gains.

The comments mark the latest escalation in a volatile trade relationship that has swung between cautious optimism and renewed confrontation since Trump’s return to the White House. Just hours before his remarks, both Trump and U.S. Trade Representative Jamieson Greer had suggested progress was being made in ongoing tariff negotiations with Beijing.

Shares of Bunge Global SA and Archer-Daniels-Midland Co., two major players in the oilseed and biofuel industries, rallied sharply following Trump’s comments, erasing earlier losses. Analysts said investors expect domestic producers to benefit if imports from China are curbed.

The dispute over used cooking oil (UCO) — a key input for renewable diesel — has been simmering for months. Imports from China surged to record levels in 2024, drawing criticism from American soybean farmers who argued that cheap foreign supplies were undercutting local production. The previous administration had already moved to restrict tax credits for imported biofuels, and Trump has since tightened the stance, with support from U.S. farm groups.

China, the world’s largest soybean importer, has largely turned to Brazil and Argentina for supplies amid worsening U.S. relations. While American farmers continue to face low crop prices, Beijing’s purchases of South American soybeans remain strong, hitting record levels in September.

The renewed trade flare-up comes as Washington and Beijing prepare for potential high-level talks later this month between Trump and Chinese President Xi Jinping. Yet the U.S. president has warned that further tariffs of up to 100% could be imposed by November 1 if China restricts rare earth exports or fails to meet prior commitments.

For now, Trump says he remains open to dialogue — but insists the U.S. will act decisively if China “continues to take advantage.” The mixed signals highlight the fragility of the current truce and the continued risk of a broader trade war that could ripple through global markets once again.