Why Trump is eyeing cooking oil as leverage in US-China trade war
Backlash against cheap UCO from China has been mounting in the US
[WASHINGTON] Cooking oil could become a new front in the US-China trade war as tensions between the two countries ratchet up. President Donald Trump said that the US is considering terminating imports from China as “retribution” for its refusal to buy American soybeans.
While Trump did not specify, the focus is likely to be on used cooking oil, better known as UCO, a waste product generated by households, restaurants and food manufacturers.
UCO can be processed into biofuels, which offer a “drop-in” solution to replace fossil fuels and are becoming increasingly popular amid the push to curb carbon emissions. One such biofuel is renewable diesel, which can power cars and trucks.
However, bringing in UCO from abroad has proven controversial in the US as agriculture groups and lawmakers say cheap foreign supply is undercutting demand for local crops used to make biofuel.
The US became a net importer of UCO by early 2022, but shipments from China have been declining this year. If Trump follows through on his threat and ban imports of Chinese cooking oil, it would likely be a largely symbolic move.
Why has Trump threatened to target Chinese cooking oil?
Trump posted on his Truth Social platform in mid-October that cooking oil “and other elements of Trade” could be targeted in retaliation against China shunning US soybeans – a boycott he called “an Economically Hostile Act” that is purposefully “causing difficulty for our Soybean Farmers.”
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China is the world’s largest buyer of soybeans, primarily crushing them to produce soymeal for its massive pig-feed industry and soyoil for cooking. Last year, American farmers provided about a fifth of the country’s imports of the crop.
But soybeans – the US’s biggest agricultural export – have become a bargaining chip in the broader trade war as China holds back on purchases, a tactic it also deployed during Trump’s first term in office.
China has not bought any American soybeans since May 2025, according to USDA data, and as of mid-September had yet to book a single cargo for the new harvest season, which kicked off at the start of that month.
Instead, it has been relying on suppliers in South America, such as Brazil and Argentina, to build up its inventories. Meanwhile, US farmers – a key voting bloc for Trump and the Republican Party – face overflowing storage bins and low prices.
What would the impact be for China if the US stopped buying its used cooking oil?
The US was the top destination for China’s UCO in 2024, according to the US Department of Agriculture, and its imports of Chinese processed edible oils, mainly UCO, hit a record 1.27 million tonnes.
However, sales have slumped this year, collapsing well before Trump floated the prospect of halting purchases. This comes as China’s government scrapped tax relief on overseas UCO sales in December, reducing the appeal of exports, while the Trump administration hiked tariffs on Chinese goods.
China shipped just 387,000 tonnes of UCO to the US across January to July – a little over half the volume sold during the same period a year earlier.
Should Trump completely shut off these UCO imports, the impact would likely be limited for China, which has both the capacity and resolve to hold firm on its soybean strategy.
Chinese UCO traders could face “short-term pressure as they redirect volumes to Europe or deal with weaker prices and higher inventories,” said Kang Wei Cheang, an agricultural broker at StoneX Group in Singapore.
The UCO trade is far less valuable to China than soybean transactions are to the US. Even at 2024’s record levels, UCO sales were worth around US$1.2 billion, compared with roughly US$12.6 billion for US soybean exports to China.
How would the US be affected if it halted purchases of Chinese used cooking oil?
Trump has said that the US “can easily produce Cooking Oil ourselves, we don’t need to purchase it from China.”
However, given that the Environmental Protection Agency has proposed increasing the amount of biofuels that must be blended into the country’s fuel mix over the next two years, the US will likely still need to source UCO from abroad.
While the US is trying to boost domestic supply of feedstocks for biofuel, it may struggle to produce enough vegetable oil for both the fuel and food sectors due to limited processing capacity. “The bottleneck is we can’t crush it all,” said Jason Miner, global head of agriculture at Bloomberg Intelligence.
Why has there been US pushback against used cooking oil from China?
Backlash against cheap UCO from China has been mounting in the US. American soybean farmers and crushers have said that imported biofuel feedstocks are undermining demand for domestic crop-based ingredients and eroding their profits.
Meanwhile, industry groups, biofuel executives and lawmakers raised concerns last year that the used oil from China could be tainted, urging the government to strengthen its verification system.
There was widespread speculation, although unconfirmed, that some shipments were being blended with fresh palm oil, which is linked to deforestation and labour abuses in South-east Asia.
US imports of Chinese UCO began to surge in 2023 as American biofuel producers snapped up cheap supply to capitalise on state and federal incentives for low-carbon fuels.
This influx stoked debate over who should have access to the lucrative 45Z tax credit for clean-fuel makers, established under President Joe Biden’s landmark climate law, the Inflation Reduction Act.
The 45Z credit is based on carbon intensity – the lower the fuel’s score, the higher the tax credit. Because UCO is a recycled waste product, it has a lower carbon-intensity score than other biofuel feedstocks that are widely made in the US, such as fresh soybean oil.
The outgoing Biden administration moved to curb UCO imports in January, excluding biofuels made using foreign feedstock from the 45Z credit.
Trump’s One Big Beautiful Bill Act, passed in July, went further – restricting the credit to US-controlled clean-fuel producers that use North American feedstocks. BLOOMBERG
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