China's Soybean Imports from US Plummet to Zero in September

China imported no US soybeans in September for the first time this year, while imports from South America surged. Shipments from the US fell due to high tariffs and the use of previously harvested supplies. Brazil arrivals jumped 29.9% year-on-year to 10.96 million tonnes, accounting for 85.2% of China's total imports. China's soybean imports reached 12.87 million tonnes in September, the second-highest level on record.

US President Donald Trump has reignited trade tensions between the United States and China by threatening to halt cooking oil imports from China. This move, framed as retaliation for Beijing's refusal to buy American soybeans, has raised concerns about potential disruptions to global agricultural trade and financial markets.

According to Bloomberg, Trump described China's decision to avoid US soybeans as an "economically hostile act," accusing Beijing of deliberately harming American farmers. He posted on social media that the US could "easily produce cooking oil ourselves" and therefore "doesn’t need to purchase it from China." This announcement sent the S&P 500 lower, reigniting investor concerns over a possible trade war.

Market reaction to the news was mixed. Shares of Bunge Global SA and Archer-Daniels-Midland Co., two major oilseed processors, rose sharply after Trump's announcement, reversing earlier declines. However, the broader stock market dipped as investors assessed the potential fallout from escalating trade tensions between the world's two largest economies.

The issue of used cooking oil (UCO) has become particularly contentious. Imports from China surged to record levels in 2024, as American biofuel producers used the cheaper foreign supply to make renewable diesel. This raised concerns among domestic soybean farmers who argued that the influx of Chinese imports undercut demand for their crops.

The Biden administration had previously sought to limit the flood of imported UCO by making foreign supplies ineligible for a key tax credit. However, Trump, returning to the White House, has doubled down on this approach, proposing new curbs to discourage reliance on Chinese imports. His position has received backing from the American Soybean Association and other farm groups, who say that Chinese policies have worsened price pressures for US growers.

Farmers are now facing uncertainty about government aid packages, with plans to compensate them for trade-related losses delayed due to the ongoing government shutdown. Many in the agriculture sector maintain that they prefer long-term trade stability with China over short-term financial assistance.

Earlier in the day, US Trade Representative Jamieson Greer had expressed optimism that discussions between Washington and Beijing were progressing. However, Trump's remarks about cooking oil and tariffs quickly reversed that optimism. Trump has also threatened a 100% tariff on Chinese goods by 1 November, depending on Beijing's next move.

The two countries had earlier agreed to keep tariffs lower in exchange for maintaining the flow of rare earth minerals and semiconductor materials. That truce, however, is set to expire on 10 November. As both nations position themselves ahead of new trade negotiations, the possibility of another major economic clash looms large—one that could once again test global markets and supply chains already strained by years of tariff disputes.