The latest exchange of hostilities between the world’s two biggest economies sounds like it could affect your kitchen, as President Donald Trump has warned China that the U.S. could cut off purchases of cooking oil, but it likely won’t.
Trump on Tuesday said his Administration was prepared to retaliate for Beijing’s refusal to buy U.S. soybeans. China was at one time the biggest buyer of American soybeans, accounting for more than 40% of total U.S. sales in typical years. But U.S. sales of the crop to China fell to virtually zero this year after the Chinese government shifted its purchases to Argentina and Brazil in response to Trump’s tariffs.
[time-brightcove not-tgx=”true”]“I believe that China purposefully not buying our Soybeans, and causing difficulty for our Soybean Farmers, is an Economically Hostile Act,” Trump said on Truth Social. “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’s threat has come as the U.S. and China have escalated protective trade measures, renewing the threat of another trade war months after the global superpowers reached a truce to lower prohibitively high tariffs. After China announced global export controls on rare earth items, Trump threatened to impose an additional 100% tariff on China, as well as other measures, beginning Nov. 1.
Ending U.S. purchases of Chinese cooking oil would be an apparent refresh of hostilities after both sides appeared keen to de-escalate earlier this week. Trump on Sunday sought to reassure markets as he posted, “Don’t worry about China, it will all be fine!” Meanwhile, Chinese and American trade negotiators have continued to meet to work out a trade deal ahead of a Nov. 10 deadline.
Here’s what to know about why cooking oil has become the latest bargaining chip between the U.S. and China, and what that does and doesn’t mean for the trade war and your kitchen.
U.S. biggest buyer of Chinese cooking oil, despite falling sales
U.S. imports of edible cooking oil from China are relatively small compared to imports of used cooking oil (UCO), which is actually the byproduct of cooking oil and is used as a raw material for fuels, animal feeds, and chemical products like machine lubricants and certain soaps. Chinese UCO imports surged in recent years after President Joe Biden’s Administration prioritized a green transition through the landmark Inflation Reduction Act of 2022, That included offering tax credits and other incentives for the use of sustainable aviation fuel by the transportation industry.
The U.S. went from being a net exporter of UCO to becoming a net importer in 2022, and China has accounted for a significant amount of those imports. In 2023, China became the top supplier of UCO to the U.S. That coincided with a drop in demand for Chinese UCO after the European Union probed Chinese imports for artificially low prices. Chinese sales to the U.S. of processed edible oils, including UCO, hit a record 1.27 million tons, worth around $1.2 billion based on recent trade estimates, in 2024. That accounted for around 43% of Chinese UCO exports last year, according to the Department of Agriculture.
But Chinese exports of UCO to the U.S. have already been on the decline this year. After American soy farmers raised concerns that the flood of Chinese UCO was crushing their ability to compete for new demand, the Biden Administration moved in January to exclude fuels made from foreign-sourced supplies from tax credits. Trump’s hefty tariffs which climbed to 145% on Chinese imports earlier this year, before being brought down to 30%, also pushed China to turn to other markets. Beijing for its part terminated export tax rebates for UCO in December. Chinese UCO exports dropped by 60% month over month in December, according to the USDA, and Bloomberg reported that the U.S. bought 387,000 tons of Chinese UCO in the first seven months of this year, down 43% from the same period last year.
The already falling sales of UCO could make it less valuable as leverage over China. Chinese imports of soybean from the U.S. last year, meanwhile, hit a total of $12.6 billion, making China’s de facto U.S. soybean ban this year a major hit to American farmers.
Tit-for-tat retaliation
Trump’s threat is just the latest in a series of tit-for-tat trade measures in recent weeks that have threatened to unsettle progress towards a trade deal.
U.S. Trade Representative Jamieson Greer on Tuesday blamed new Chinese export controls on rare earth products, which apply globally, for reigniting trade tensions. “They are the ones who have chosen to make this major escalation,” Greer told CNBC. As for whether the two countries can work out a trade deal, or extended truce, or engage in a trade war, “a lot depends on what the Chinese do,” he said.
Beijing defended its export controls, noting that the U.S. has imposed several trade restrictions on China amid their truce, including introducing new port fees and expanding its export controls to block Chinese access to the most advanced semiconductor chips.
“Our agreement was we’re going to keep our tariffs low if you keep the rare earths flowing,” Greer said. “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.”
China’s Commerce Ministry on Sunday accused the U.S. of double standards and “overstretching the concept of national security, abusing export control, taking discriminatory actions against China, and imposing unilateral long-arm jurisdiction measures on various products including semiconductor equipment and chips.”
In apparent response to some U.S. actions, China has introduced new port fees on American vessels and launched antitrust probes of American companies. But its rare earth controls would have the hardest hit, as the minerals are critical to the U.S. defense sector as well as to its semiconductor industries. Part of the new measures include a default rejection of licenses to export rare earths for military uses.
Even as the U.S. and China appear to be provoking more aggressive action, which some analysts have said could be an attempt at increasing leverage over the other in negotiations, Trump struck a reassuring tone about tensions with China. “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 on Tuesday. “We have a lot of punches being thrown, and we’ve been very successful.”
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