President Donald Trump warned Tuesday that the United States may halt cooking oil imports from China, escalating trade tensions between the world’s two largest economies as disputes over soybeans, rare earth minerals, and tariffs threaten to derail months of diplomatic efforts toward reaching a comprehensive trade agreement. The threat came just hours after Trump told White House reporters that relations with Beijing remained fair and would likely be fine.
Trump posted on Truth Social that China’s refusal to purchase American soybeans constitutes an economically hostile act deliberately designed to harm US farmers. The president said his administration is considering terminating business with China involving cooking oil and other trade elements as retribution, arguing the United States can easily produce cooking oil domestically without relying on Chinese supplies.
The statement injected fresh volatility into financial markets, with the S&P 500 falling immediately after the post went public. Stocks ended Tuesday’s trading session in negative territory following a volatile day marked by investor uncertainty about the trajectory of US China relations. Markets have whipsawed throughout the week as Trump alternates between conciliatory comments and aggressive threats against Beijing.
China has traditionally served as the top export market for American soybeans, routinely accounting for more than 40 percent of total US sales in typical years. However, Chinese importers have not purchased a single American soybean in recent months amid the ongoing trade conflict. Beijing has instead sourced supplies from South American producers, particularly Brazil and Argentina, leaving US farmers facing severe financial pressure during harvest season.
The soybean standoff reflects broader deterioration in trade relations during Trump’s second term. After both countries appeared to reach a truce earlier this year that brought tariffs down from triple digit levels, tensions have reignited over rare earth export controls, port fees, and subsidiary sanctions. Trump announced plans last Friday to impose an additional 100 percent tariff on all Chinese imports starting November 1, though US Trade Representative Jamieson Greer indicated the timing could be accelerated depending on Beijing’s next moves.
Treasury Secretary Scott Bessent accused China of attempting to destabilize global markets through sweeping export controls on rare earth materials vital for high tech manufacturing and defense industries. Bessent characterized Beijing’s actions as evidence of a weak economy trying to drag everyone else down, framing China’s trade policies as economically destructive rather than strategically rational.
Trump’s relationship with Chinese President Xi Jinping has grown increasingly strained despite the president’s repeated claims of maintaining great personal rapport. Trump told reporters Tuesday that while he has a great relationship with Xi, interactions sometimes get testy because China likes to take advantage of people. When punches are thrown, the president said, you have to put up the blocks.
The cooking oil threat specifically targets used cooking oil, which China exports to the United States for use in biofuel production, particularly ethanol. However, Chinese exports of used cooking oil to America were already declining sharply before Trump identified them as a trade war flashpoint. The Biden administration moved in January to exclude fuels made from foreign sourced supplies from tax credits after American soy farmers raised concerns that floods of Chinese used cooking oil were crushing their ability to compete for new demand.
Trump’s tariffs on Chinese imports, which climbed as high as 145 percent earlier this year before falling to 30 percent, also pushed China to redirect used cooking oil exports toward other markets. The declining trade means Trump’s threatened ban may have limited practical impact on either buyers or sellers, raising questions about whether the move represents substantive policy or rhetorical posturing aimed at demonstrating toughness to domestic political constituencies.
Soybeans remain far more economically significant than used cooking oil in the bilateral trade relationship. The complete cessation of Chinese soybean purchases has devastated American farmers who depend heavily on that export market for economic viability. Trump promised farmers a government bailout to offset losses from Chinese boycotts, but the relief payments have yet to materialize, leaving agricultural communities frustrated and financially squeezed during harvest season.
The timing of China’s soybean boycott has coincided suspiciously with other developments in US trade diplomacy. China recently purchased large soybean cargoes from Argentina immediately after that country dropped a key export tax, just as the United States was pledging a $20 billion currency swap to support Argentina’s economy. Argentine President Javier Milei visited Trump at the White House on Tuesday, hours before the president issued his latest threats against China.
The apparent coordination between Argentina’s tax elimination, Chinese soybean purchases, and US financial support suggests complex geopolitical maneuvering where multiple countries attempt to leverage trade relationships for strategic advantage. China’s willingness to pay approximately 15 percent premiums for Brazilian soybeans over cheaper American supplies indicates Beijing views the boycott as strategically valuable despite being economically irrational from a pure cost perspective.
US Trade Representative Greer told CNBC that China’s new rare earth export controls have derailed efforts by both sides to settle trade differences through negotiation. Much depends on what the Chinese do, Greer said, characterizing Beijing as having chosen to make this major escalation. China responded by accusing the United States of applying double standards and vowing readiness to fight to the end if a full scale trade war resumes.
Trump hinted last week he might cancel a planned meeting with President Xi at the upcoming Asia Pacific Economic Cooperation summit, citing dissatisfaction with Chinese trade policies. The potential diplomatic snub would represent a significant breakdown in high level communication between Washington and Beijing at a time when multiple flashpoints threaten to spiral into broader economic confrontation.
China’s dominance in rare earth mineral production gives Beijing substantial leverage in the trade conflict. The country mines 69 percent of rare earth minerals globally, processes 88 percent of rare earth concentrates, and refines 90 percent of rare earth metals worldwide. These materials prove critical for manufacturing magnets used in electronics, electric vehicles, and defense systems, making Chinese export restrictions potentially disruptive across multiple strategic industries.
The renewed trade tensions carry global economic implications beyond bilateral US China relations. Supply chain disruptions, rising prices, and strained diplomatic ties between Washington and Beijing threaten to ripple across international markets. Analysts warn that escalating confrontation between the world’s two largest economies could derail global growth, particularly if other nations get drawn into choosing sides or implementing their own protective trade measures.
For American farmers, the trade war creates immediate financial hardship without clear resolution timelines. Soybean harvest occurs in autumn, meaning farmers must decide now whether to plant next year’s crops despite uncertainty about market access. The absence of Chinese buyers fundamentally alters planting economics, potentially leading farmers to switch to alternative crops or reduce overall acreage, with long term implications for American agricultural production capacity.
Trump’s public messaging on China has oscillated wildly between confrontation and conciliation. Earlier Tuesday, before posting his cooking oil threat, the president told reporters that US China relations were fair and would likely be fine, adding that if not, that was okay too. The contradictory statements within hours of each other create confusion about administration strategy and complicate efforts by negotiators on both sides to identify productive paths forward.
The cooking oil threat represents another example of Trump’s preference for unconventional trade weapons that capture media attention while potentially carrying limited substantive impact. By focusing on a product category where imports were already declining due to policy changes and tariffs, Trump creates the appearance of tough action without necessarily imposing new economic costs on China or delivering tangible benefits to affected American industries.
Whether Tuesday’s threat translates into actual policy remains uncertain. Trump frequently uses social media posts to test reactions, apply pressure, or satisfy political bases without following through on implementation. Market participants and foreign governments have learned to discount some presidential statements while taking others seriously, creating an environment of persistent uncertainty about which pronouncements signal genuine policy intentions.
The fundamental challenge underlying current trade tensions involves reconciling incompatible objectives. China seeks to maintain its dominant position in strategic industries like rare earth processing while expanding exports across multiple sectors. The United States aims to reduce dependence on Chinese supply chains for critical materials while protecting domestic industries from what officials characterize as unfair competition. These goals inherently conflict, making comprehensive trade agreements difficult to negotiate and sustain.
Both governments face domestic political pressures that limit flexibility in negotiations. Trump must demonstrate toughness toward China to satisfy his political base while delivering tangible benefits to farmers and manufacturers. Chinese leaders cannot appear weak in responding to American pressure without facing internal criticism for damaging national interests. These political constraints narrow the space for compromise even when economic logic suggests mutual benefits from reducing trade barriers.
Looking ahead, the trajectory of US China relations over coming weeks will determine whether current tensions represent temporary friction or signal fundamental deterioration in the bilateral relationship. Trump’s threatened November 1 tariff increase provides a deadline focusing negotiations, but also creates risks of escalation if neither side demonstrates flexibility. The planned APEC summit offers potential for high level dialogue, assuming Trump follows through on attending and meeting with Xi.
For now, cooking oil has joined soybeans, rare earths, port fees, and tariffs on the growing list of trade irritants straining relations between Washington and Beijing. Whether Trump’s latest threat produces meaningful policy changes or simply adds to the noise surrounding US China economic relations remains to be seen. What seems certain is that volatility, uncertainty, and escalating rhetoric will continue characterizing the trade relationship between the world’s two economic superpowers.
Source: newsghana.com.gh
