China reiterated on Wednesday that trade wars had "no winners," after U.S. President Donald Trump warned that Washington could stop buying cooking oil from the country, a move analysts suggested would have no major impact.
Trump said on Tuesday he was considering terminating some trade ties with China, singling out cooking oil even though traders and analysts said such shipments have already been plummeting.
"I believe that China purposefully not buying our Soybeans, and causing difficulty for our Soybean Farmers, is an Economically Hostile Act. 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.
"As an example, we can easily produce Cooking Oil ourselves; we don't need to purchase it from China."
The U.S. was China's top market for used cooking oil (UCO), importing a record 1.27 million metric tons worth $1.1 billion in 2024. However, after China cut tax rebates late last year and the U.S. imposed tariffs on Chinese goods this year, imports dropped 65% from January through August to 290,690 tons, or $286.7 million.
As such, Trump's comments have had "minimal" impact on the market, two UCO traders in China said on condition of anonymity as they were not authorized to speak to the media.
"The U.S. pretty much stopped buying from China anyway, so the impact is as empty as his threats," said one of the traders, who deals with the U.S. market.
"Domestic producers are now mainly taking orders for Europe and are no longer considering the U.S. market," said the other.
The U.S. does not have a long history of being a top export market for Chinese used cooking oil, a product that can be converted into renewable diesel and which has helped the U.S. become one of China's top ten export destinations only as recently as 2022.
By contrast, the Netherlands, Singapore, Spain and Malaysia have consistently processed hundreds of millions of dollars worth of Chinese UCO over the past decade, Chinese customs data shows.
Year-to-date shipments to this year's top buyer, Singapore, are up 15% from last year at $537 million, while exports to the Netherlands – whose figures are distorted by the Rotterdam megaport – have jumped 131.5% over the same period.
Chinese used cooking oil exports to the U.S. had surged in 2023, driven by federal and state incentives supporting biofuels and a rush to build new renewable diesel plants.
Analysts said Trump's announcement was not escalatory following a week of fresh tariff threats and export controls.
Beijing imposed fresh controls on the export of rare earth technologies and other items last week, leading Trump to warn Friday that he would roll out an additional 100% tariff on the country's goods from Nov. 1.
China's Foreign Ministry on Wednesday said trade disputes were "not in the interests of any party" when asked about Trump's threat on cooking oil.
"The two sides should resolve relevant issues through consultation on the basis of equality, respect and mutual benefit," spokesperson Lin Jian told reporters at a regular briefing.
"China's position on China-U.S. economic and trade issues is consistent and clear," he added.
The used cooking oil trade is small compared with that of soybeans. Last year, China imported 22.13 million tons of U.S. soybeans worth $12 billion.
But restricting UCO imports allows Trump to show the U.S. agriculture industry he is still being tough on China, some analysts said.
"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," said senior analyst Chim Lee at the Economist Intelligence Unit.
China is the world's largest buyer of soybeans. In recent months, it has slashed purchases of U.S. soybeans in favor of Brazilian and Argentine produce.
Trump has called the shift a negotiation tactic. He said this month he hoped to discuss soybeans with Chinese counterpart Xi Jinping while also indicating that the U.S. may halt a large share of imports 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?" Brad Setser, a former U.S. trade official now with the Council on Foreign Relations, wrote on X.
"Definitely not escalatory."
