Shares of companies in the cooking oil business continued to climb in early Wednesday trading, after President Donald Trump started using oils as leverage in his growing trade spat with China.
The rallies started very late in Tuesday’s session, after Trump took another shot at China President xi Jinping ahead of an economic summit in Asia later this month. Trump wrote in a post on X, formerly known as Twitter, that the U.S. would be imposing tariffs on all cooking oils imported from China, citing unfair trade practices and national security concerns.
“China has been ripping us off on cooking oil for years!” Trump wrote. “No more! We will protect our farmers and our consumers.”
The announcement sent shockwaves thru the market, with shares of companies like Cargill, Archer-Daniels-Midland (ADM), and Bunge all experiencing significant gains. Cargill was up 5% in early trading, ADM was up 4%, and Bunge was up 3%.
analysts say the move is likely to further escalate tensions between the two countries, but it could also benefit American cooking oil producers. “This is a clear win for the U.S. cooking oil industry,” said one analyst at a major investment bank. “It will give them a competitive advantage and help to boost profits.”
Though, some experts warn that the tariffs could also lead to higher prices for consumers. “Cooking oil is a staple food item, and any increase in price will be felt by families across the contry,” said one economist. “This is a risky move by the Trump governance, and it could backfire.”
The economic summit in Asia is scheduled to take place next week,and all eyes will be on whether Trump and Xi Jinping can reach a resolution to the trade dispute. But with Trump continuing to escalate tensions, a breakthrough appears increasingly unlikely.
Trump suggests Potential Trade Restrictions with China Over Soybean Purchases
Former President Donald Trump indicated on Tuesday he is considering restricting business with China related to cooking oil, citing China’s lack of purchases of American soybeans. He made the statement in a Truth Social post late Tuesday.
The post suggests a potential escalation of trade tensions between the two countries. while Trump did not provide specifics on how such restrictions would be implemented, the statement highlights ongoing concerns regarding trade imbalances and agricultural exports.
During his presidency, Trump initiated a trade war with China, imposing tariffs on billions of dollars worth of goods. A key component of those negotiations involved China increasing its purchases of U.S.agricultural products, including soybeans. While China did increase soybean purchases at times, the trade relationship remains complex and subject to geopolitical factors.
As of November 2023, the United States department of Agriculture (USDA) reported that China remains a significant importer of U.S. soybeans, but purchases have fluctuated. The USDA’s latest data provides detailed data on trade flows.
It is currently unclear whether Trump’s recent statement signals a concrete policy shift or is simply a rhetorical expression of frustration with China’s trade practices. Further details regarding any potential actions are expected to emerge if the former president pursues this course of action.