President Donald Trump escalated trade tensions with China this week, threatening targeted retaliation over Beijing's continued refusal to buy U.S. soybeans, a move that has added pressure to an already strained farm economy.

"I believe that China purposefully not buying our Soybeans... is an Economically Hostile Act," Trump wrote Tuesday on his Truth Social platform. "We are considering terminating business with China having to do with Cooking Oil, and other elements of Trade, as retribution." The former president added that the U.S. could easily produce its own cooking oil and doesn't need to rely on Chinese imports.

While the White House has yet to clarify whether Trump's comments refer to crude, refined, or used cooking oil, the implications for the biofuel sector are significant. China has emerged in recent years as a major supplier of used cooking oil (UCO) for U.S. biofuel production, particularly in low-carbon fuel programs.

Imports of UCO from China rose tenfold between 2022 and 2024, thanks to favorable carbon-intensity scores under federal and state incentives, including California's Low Carbon Fuel Standard. However, that trend has reversed sharply in 2025 due to policy changes in Washington.

Under the "One Big Beautiful Bill" (OBBB) signed earlier this year, Congress restricted access to the Inflation Reduction Act's 45Z Clean Fuel Production Credit to fuels made from North American feedstocks starting in 2026. As a result, Chinese UCO imports have dropped significantly this year, with additional downward pressure coming from China's removal of export tax rebates and a proposed rule from the EPA to slash incentives for imported feedstocks under the Renewable Fuel Standard (RFS).

Despite these developments, China has not placed any new orders for the 2025 U.S. soybean crop, leaving many American growers hoping that stronger domestic demand for biofuels and sustainable aviation fuel can offset some of the lost export market.

Agricultural leaders responded cautiously but welcomed the renewed focus on domestic feedstocks.
Paul Winters of Clean Fuels Alliance America said the administration should quickly finalize both the proposed RFS volumes and the 45Z rules. "These steps would provide meaningful support for soybean farmers and the biofuel sector," he noted.

Devin Mogler, CEO of the National Oilseed Processors Association, echoed the sentiment, saying "We recognize the pain that soybean farmers are dealing with right now, and we think that strong domestic biofuel policies are a great way to address that concern." Mogler added that much of the demand growth in renewable diesel has been met by imported feedstocks, not U.S.-grown soybeans, and that a shift toward domestic sourcing is long overdue.

He also applauded Trump for recognizing the below-market sale of Chinese UCO, which he said undermines American feedstock growers.

The American Soybean Association (ASA) issued a statement praising Trump's attention to the issue while emphasizing the need to restore access to the Chinese market. "As trade negotiations continue deep into harvest season, we hope discussions can get back on track," the group said. However, ASA also urged the administration to finalize the EPA's proposed changes that would discount foreign feedstocks by 50% for RFS compliance, promoting U.S. soybean oil as the fuel industry's primary feedstock.

Trump's comments follow his recent announcement of a return to 100% tariffs on all Chinese imports starting November 1, after China expanded its export restrictions on rare earth elements. While Beijing has not yet issued a new retaliatory tariff list, it has vowed to "take resolute measures" to defend its interests.

Trade officials from both countries met Monday to discuss escalating tensions, but no breakthroughs were reported.

For now, U.S. soybean farmers remain caught between geopolitics and shifting biofuel markets, hoping that a combination of domestic policy and trade diplomacy can salvage a difficult harvest season.