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The S&P 500 turned negative as Trump’s comments re-escalated the conflict with China. (Stefani Reynolds/Bloomberg)

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U.S. President Donald Trump said he might stop trade in cooking oil with China, injecting fresh tensions into the trade relationship between the world’s two largest economies.��

Trump on Oct. 14 cast the potential move as retaliation against Beijing for its refusal to buy American soybeans, which he said “is an Economically Hostile Act” that is purposefully “causing difficulty for our Soybean Farmers.”

“We are considering terminating business with China having to do with Cooking Oil, and other elements of Trade, as retribution. As an example, we can easily produce Cooking Oil ourselves, we don’t need to purchase it from China,” Trump posted on social media.

The benchmark S&P 500 turned negative as Trump’s comments re-escalated the conflict with China. Just hours earlier, both Trump and U.S. Trade Representative Jamieson Greer expressed confidence that friction would ease through ongoing trade talks. Shares of crop traders Archer-Daniels-Midland Co. and Bunge Global SA jumped on the news, erasing earlier declines.

Cutting off cooking oil trade could have wide-ranging effects for the American heartland and in energy markets. Used cooking oil, as well as soybeans, are a feedstock for biofuels such as renewable diesel. Trump’s administration was already moving to��reduce��incentives to bring in foreign supplies of used cooking oil.����from China reached a record high in 2024, according to the Agriculture Department.

The events Oct. 14 exemplified the whiplash that has characterized the U.S.-China relationship since Trump’s return to the White House, which has kept investors anxious about the eruption of a full-blown trade war.

Greer had buoyed hopes that tariff negotiations with the Chinese government remained on the table, saying that unnamed senior-level officials from Washington and Beijing held discussions Monday and that Trump and Chinese President Xi Jinping still have a “scheduled time” to meet later this month.

Trump, too, sounded cautiously optimistic a positive outcome could be reached.

“We have a fair relationship with China, and I think it’ll be fine. And if it’s not, that’s OK too,” Trump told reporters earlier Oct. 14 at the White House. “We have a lot of punches being thrown, and we’ve been very successful.”

(Bloomberg Television via YouTube)

That had soothed worries that were inflamed when Beijing sanctioned the U.S. units of a South Korean shipping giant and threatened further actions against the industry, the latest tit-for-tat retaliation between the two sides.

Both nations have sought to build leverage ahead of new trade negotiations by slapping new restrictions on shipments of rare-earth-minerals and semiconductors — materials that lie at the heart of their trade conflict. In response to recent Chinese measures, Trump��threatened��to impose an additional 100% tariff on goods from China by Nov. 1 and raised the prospect of canceling his meeting with Xi at the Asia-Pacific Economic Cooperation summit in South Korea.

“Whether it’ll go through or not, I don’t want to pre-commit either ourselves or the Chinese, but I think it makes sense for people to talk when they can,” Greer said of the meeting.

Whether the 100% tariff goes into effect “depends a lot on what the Chinese do,” Greer said. The U.S. and China earlier this year reached a truce on tariffs after escalation between the two saw U.S. levies on Chinese goods surge to as high as 145%. The latest extension is set to expire Nov. 10.

“Our agreement was we’re going to keep our tariffs low if you keep the rare earths flowing, they’re now saying that they’re going to control more rare earths and downstream products. And so it makes sense that, you know, we can raise our tariffs,” he said.

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