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Trump Opens New Front in China Trade War: Cooking Oil

Oct 14, 2025 13:47:00 -0400 by Reshma Kapadia | #China

U.S. Trade Representative Jamieson Greer. (Kayla Bartkowski/Getty Images)

Key Points

President Donald Trump has opened a new front in the trade war with China: cooking oil.

Calling China’s decision not to buy soybeans from American farmers purposeful and “an Economically Hostile Act,” Trump said on his social media account that the administration was considering terminating business with China having to do with cooking oil and “other elements of trade.” He called it retribution.

“We can easily produce Cooking Oil ourselves, we don’t need to purchase it from China,” Trump said in the post, which appeared at 3:37 p.m. Eastern time and sent shock waves through the stock market.

The S&P 500 had staged a recovery from steep losses earlier in the day but reversed course after Trump’s post appeared and ended the day in the red, down 0.2%.

It is just the latest salvo in the escalating tensions between the two sides. Earlier in the day, Trump floated the prospects of levying tariffs on Spain because he told reporters he was unhappy that the country wasn’t raising its military spending to 5% of its gross domestic product.

The remarks come amid a re-escalation in trade tensions with its biggest geopolitical rival: China. Last week, Beijing unveiled sweeping export controls on rare-earth minerals, prompting President Donald Trump to threaten 100% tariffs on China on top of the average effective tariffs of 55% already in place.

U.S. and China officials at the senior staff level talked on Monday following a flare-up in trade tensions between the two geopolitical rivals, U.S. Trade Representative Jamieson Greer told CNBC in an Tuesday interview before the post about cooking oil.

Greer noted a willingness from his Chinese counterparts to talk to defuse the tensions that upended a fragile detente between the two rivals. But he also said Trump’s threat of 100% tariffs on Nov. 1 or sooner still holds—and is based on what the Chinese do.

“We can’t have a situation where the Chinese keep this regime in place where they want to have veto power over the world’s high-tech supply chains,” Greer said. “They are the ones who chose to make this major escalation. Our agreement was that we would keep our tariffs low if you keep the rare earths flowing.”

A spokesperson for the Chinese embassy in Washington, D.C., didn’t immediately respond to Barron’s request for comment.

Greer said China’s expansion of export controls on rare earths critical for autos, technology, and defense came out of nowhere and was “completely disproportionate” to measures the U.S. has taken on semiconductors.

China’s move, he said, was broad-based, impacting the entire world and a range of products—including low-tech items. China’s restrictions have not yet gone into effect.

“It’s basic materials that they’re trying to control,” Greer said. “The Chinese need other people to buy products that contain these things—iPhones and computers and other things. They are really shooting themselves in the foot.”

Beijing has said its move mirrored measures the U.S. had taken in the past to restrict China’s access to critical technology, including semiconductor equipment, and followed the U.S. expanding its list of blacklisted companies to include more Chinese businesses.

Overnight, China’s Ministry of Commerce said if China is forced to fight, “it will fight to the end,” but also said the door is always open for talks.

Markets have taken some relief in a toning-down in rhetoric from both sides. Greer said he thinks the U.S. will be able to work through the latest impasse. While unclear if it will happen, he also noted the meeting between Trump and Chinese leader Xi Jinping on the sidelines of the Asia-Pacific Economic Cooperation at the end of the month is still on the schedule.

Some analysts were puzzled by the latest threats toward China’s cooking oil. But Veda Partners’ Henrietta Treyz noted a shift in approach by the U.S. from broad-based tariffs to focusing on soy-specific items given China’s boycott of U.S. soybean purchases, which has hit U.S. farmers hard. A White House spokesman didn’t immediately respond to a request for comment. The focus on cooking oil could be part of a broader push to increase domestic production. In April, Agriculture Secretary Brooke Rollins said the USDA was working on ways to “address the challenges associated with imported used cooking and imported tallow,” which she said was displacing homegrown biofuels. Owen Tedford, analyst at Beacon Policy Advisors, expects things to “get weird” in the next couple of weeks as Trump reacts to issues brought before him with threats that may eventually be moderated. Tedford still expects a Xi-Trump meeting at the end of the month in Korea. He has low expectations for the meeting beyond it offering an opening for another detente—with any move toward a longer-term extension of the deadline for tariffs a positive. The rivals had hit pause on tariffs rising to 145% on China and 125% on the U.S. until Nov. 10. If Xi and Trump are able to make headway on export restrictions, analysts see a possibility that the U.S. lowers tariffs related to fentanyl flows on China in return for soybean purchases. For investors, the tit for tat further underscores the view that the tariff threat isn’t going away. “There’s a cyclical nature to the U.S.-China relationship. You’ll have periods of stability—like we’ve had recently and could still have—but even in those periods there is this constant undercurrent of mistrust and efforts to disentangle from each other, which will prevent any grand bargains and sweeping deals,” Tedford says.
Write to Reshma Kapadia at reshma.kapadia@barrons.com