Cooking oil supplies from China have already fallen precipitously over the past year, so traders and analysts suggested that U.S. President Donald Trump's announcement that he was considering cutting some trade relations with China, specifically targeting cooking oil, would not have much of an impact.
"I think it is economically hostile for China to deliberately stop purchasing our soybeans and to make things tough for our soybean farmers. As retaliation, we are thinking about ending our business with China related to Cooking Oil and other aspects of trade," Trump posted on social media on Tuesday. "As an example, we can easily produce Cooking Oil ourselves, we don't need to purchase it from China."
In 2024, the U.S. imported a record 1.27 million metric tons of used cooking oil (UCO) valued at $1.1 billion, making it China's largest market. However, imports fell 65% between January and August to 290,690 tons, or $286.7 million, after China reduced tax refunds late last year and the United States put tariffs on Chinese goods this year.
Trump's remarks would therefore have "minimal" effect on the commodity, according to two UCO merchants in China who spoke on condition of anonymity because they were not permitted to address the media.
Trump's remarks would therefore have "minimal" effect on the commodity, according to two UCO merchants in China who spoke on condition of anonymity because they were not permitted to address the media.
"Domestic producers are now mainly taking orders for Europe and are no longer considering the U.S. market," stated a trader.
Brief History as a Chinese Cooking Oil Export Market
Chinese used cooking oil, which can be turned into renewable diesel, has not historically been a primary export destination for the United States. In fact, it was only in 2022 that the U.S. ranked among China's top 10 export destinations.
Brief History as a Chinese Cooking Oil Export Market
Chinese used cooking oil, which can be turned into renewable diesel, has not historically been a primary export destination for the United States. In fact, it was only in 2022 that the U.S. ranked among China's top 10 export destinations.
In contrast, Chinese customs data indicates that over the past ten years, the Netherlands, Singapore, Spain, and Malaysia have routinely processed hundreds of millions of dollars' worth of Chinese UCO.
While exports to the Netherlands, whose numbers are skewed by the Rotterdam megaport, have increased 131.5% over the same time period, shipments to Singapore, this year's top buyer, are up 15% from the previous year at $537 million.
Due to a rush to construct new renewable diesel plants and federal and state subsidies promoting biofuels, Chinese used cooking oil shipments to the United States increased dramatically in 2023.
While exports to the Netherlands, whose numbers are skewed by the Rotterdam megaport, have increased 131.5% over the same time period, shipments to Singapore, this year's top buyer, are up 15% from the previous year at $537 million.
Due to a rush to construct new renewable diesel plants and federal and state subsidies promoting biofuels, Chinese used cooking oil shipments to the United States increased dramatically in 2023.
The announcement made by Trump is 'not escalatory,' according to analysts.
Trump's announcement, according to analysts, was hardly escalatory after a week of new export restrictions and tariff threats.
The trade in used cooking oil is far larger than that of soybeans. China imported $12 billion worth of U.S. soybeans last year, totaling 22.13 million tons.
However, other analysts argued that Trump may demonstrate to the U.S. agriculture sector that he is still strong on China by limiting UCO imports.
According to senior analyst Chim Lee of the Economist Intelligence Unit, "used cooking oil is a niche trade, but it shows how the Trump Administration is standing up for American farmers, just as China shifts its agricultural purchases towards other suppliers."
Trump's announcement, according to analysts, was hardly escalatory after a week of new export restrictions and tariff threats.
The trade in used cooking oil is far larger than that of soybeans. China imported $12 billion worth of U.S. soybeans last year, totaling 22.13 million tons.
However, other analysts argued that Trump may demonstrate to the U.S. agriculture sector that he is still strong on China by limiting UCO imports.
According to senior analyst Chim Lee of the Economist Intelligence Unit, "used cooking oil is a niche trade, but it shows how the Trump Administration is standing up for American farmers, just as China shifts its agricultural purchases towards other suppliers."
The biggest buyer of soybeans worldwide is China. It has drastically reduced its imports of U.S. soybeans in favor of supplies from Argentina and Brazil in recent months.
Trump has referred to the change as a negotiating strategy. He stated that he intended to speak with Chinese counterpart Xi Jinping this month on soybeans, but he also hinted that the United States would stop importing a significant portion of goods from China.
"So from 100% tariffs on all Chinese trade (in response to the rare earth/critical mineral export controls) to targeted sanctions on cooking oil?" Former American trade official Brad Setser, who currently works for the Council on Foreign Relations, posted on X.
Trump has referred to the change as a negotiating strategy. He stated that he intended to speak with Chinese counterpart Xi Jinping this month on soybeans, but he also hinted that the United States would stop importing a significant portion of goods from China.
"So from 100% tariffs on all Chinese trade (in response to the rare earth/critical mineral export controls) to targeted sanctions on cooking oil?" Former American trade official Brad Setser, who currently works for the Council on Foreign Relations, posted on X.
"Definitely not escalatory." (Ella Cao and Joe Cash in Beijing, Aizhu Chen in Singapore, and Kanishka Singh in Washington reported; Ismail Shakil, Christopher Cushing, and Bernadette Baum edited.)
