What's happened
President Trump has escalated trade tensions with China by considering tariffs on used cooking oil and other imports, retaliating against China's refusal to buy US soybeans amid ongoing trade disputes. The move follows China's export controls on rare earths and recent trade disagreements.
What's behind the headline?
Strategic Escalation
The US's consideration of tariffs on Chinese used cooking oil signals a shift from targeted trade disputes to broader economic retaliation. This move leverages biofuel supply chains, which are increasingly vital for US green policies, to pressure China.
Economic Implications
China's export controls on rare earths and the US's retaliatory tariffs could disrupt global supply chains, especially in high-tech manufacturing. The escalation risks prolonging trade uncertainty, potentially impacting global markets.
Political Dynamics
Trump's rhetoric frames China's refusal to buy US soybeans as 'hostile,' justifying retaliatory tariffs. This narrative aims to rally domestic support by portraying China as an economic adversary, while complicating diplomatic negotiations.
Future Outlook
The upcoming US-China summit in South Korea will be critical. If negotiations falter, the trade war could intensify, affecting commodities markets and biofuel industries worldwide. The US's focus on used cooking oil as a trade weapon underscores the strategic importance of biofuel feedstocks in future trade policies.
What the papers say
Bloomberg reports that Trump has escalated trade tensions by considering tariffs on Chinese imports like used cooking oil, citing China's refusal to buy US soybeans as a 'hostile act.' The articles detail how US biofuel demand has increased UCO imports, especially from China, since 2022, and how China's export controls on rare earths have further complicated negotiations. The South China Morning Post highlights Trump's framing of China's actions as economic hostility and the potential for further tariffs. Bloomberg also notes that the US is contemplating retaliatory measures, including tariffs on cooking oil, to counter China's trade stance, with the upcoming summit in South Korea seen as a pivotal moment.
How we got here
The US and China have been engaged in a prolonged trade war, with China refraining from purchasing US soybeans due to tariffs and trade disputes. Trump has accused China of 'economically hostile acts' and is exploring retaliatory measures, including tariffs on Chinese exports like used cooking oil, which is used in biofuels. The US's surge in UCO imports since 2022, especially from China, is linked to green transportation policies and biofuel demand. China's recent export controls on rare earths have further complicated negotiations, prompting US tariffs and escalating trade tensions.
Go deeper
Common question
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Donald John Trump is an American politician, media personality, and businessman who served as the 45th president of the United States from 2017 to 2021.
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China, officially the People's Republic of China, is a country in East Asia. It is the world's most populous country, with a population of around 1.4 billion in 2019.
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The United States of America, commonly known as the United States or America, is a country mostly located in central North America, between Canada and Mexico.
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Xi Jinping is a Chinese politician serving as the general secretary of the Communist Party of China, president of the People's Republic of China, and chairman of the Central Military Commission.