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Recently, the US side "to ban the import of Chinese edible oil" speech in the public opinion, because of the most dramatic details, this so-called edible oil ban, in fact targeted is not the real sense of edible oil, but is called "used cooking oil" (UCO), commonly known as "debris oil", which makes the whole event, from the crisis people initially anticipated, turned into some sort of drama.

In the U.S.-China trade, soybeans have long been the focus and code. U.S. farmers have long relied on China as a major export destination, and China has also been an important buyer of U.S. soybeans. However, in recent years, China has repeatedly adjusted its import structure, significantly reducing or even suspending soybeans imports from the U.S., representing a substantial shock to U.S. farmers.

According to media reports, U.S. insiders say the U.S. is considering listing Chinese oil (including wasted oil) as one of the targets of trade retaliation in response to China's "cold treatment" of U.S. soybeans imports. Bloomberg notes that U.S. officials have blurred the boundaries between "eating oil" and "wasted oil" in discussions. Reuters also that the U.S. "will end part of its trade relationship with China, including eaten oil" as an option.

In fact, the U.S. has long relied on China¡¯s waste oil imports. Producing biofuels with waste oil as raw materials, in the framework of U.S. green energy and carbon reduction policies, enjoys policy subsidies and tax preferences, making it more attractive. The media generally believes that the US¡¯s so-called ¡°eat oil ban¡± is more like a strategy attempt to ¡°hit back with oil¡± than a traditional sense of oil trade sanctions.

But the irony is that the "target" of this policy is wrong, and the logic can't stand it: if China's waste edible oil is not imported, the biofuel industry chain in the United States may encounter the problems of rising costs and shortage of raw materials; In other words, if the United States really doesn't "need" China's "waste oil", why does it import it for a long time and become dependent? This contrast immediately exposes the incoherence of logic at the decision-making level.

Trump lifts signed decree.

First of all, to put it bluntly, it is a misjudgment of basic common sense that the United States confuses "waste edible oil" with "edible oil". In the daily context, edible oil is used for cooking and seasoning, while waste edible oil is often the treated residue left after cooking and is used for industrial purposes or biofuel raw materials. The failure of the United States to distinguish at the rhetorical level reflects the lack of accurate understanding of the industrial chain in its policy thinking.

What¡¯s more, the U.S. pointed out that ¡°we can produce eaten oil ourselves, we don¡¯t need to buy from China.¡± The phrase appears to be dynamic on the surface, and actually leaks out: the U.S. itself almost doesn¡¯t import eaten oil from China, its real import is waste oil, mainly for the development of green energy.

Secondly, even if this ban is implemented, its impact will be extremely limited. Many media pointed out that China's exports of waste edible oil to the United States have dropped sharply recently. Bloomberg reported that China's waste oil exports to the United States fell sharply earlier this year. Reuters also pointed out that if the United States really stops importing waste oil, the real economic impact on the United States and China will not be too great. Or to put it more bluntly, the US "gutter oil diplomacy" seems to be fierce, and it has been dismantled to pieces before it landed.

Third, the US's disorderly punches will not only help solve the soybean problem, but will also have a negative impact on the US biofuel industry. American farmers, especially soybean growers, have long had high expectations for the China market. Now that China has suspended imports and turned to other sources, U.S. soybean stocks have been under pressure and prices have fallen. This made the U.S. government eager to express its position under domestic pressure. The United States chose to "target China's edible oil" in essence to show strength to domestic soybean interest groups. However, if the United States really bans the import of waste oil, its biofuel industry chain will be damaged. Waste oil plays an important role in the United States 'green fuel policy, and its price is closely related to subsidy policies. A ban on these raw materials could shake the supply base of the U.S. new energy industry. It can be said that "those who hurt others will hurt themselves, and those who harm others will harm themselves." There have also been calls in the United States that such policies lack industrial considerations.

An ambitious political show of "banning the import of China's edible oil" eventually turned into an absurd drama of "exchanging gutter oil for soybeans." What people saw from it was the anxiety and confusion of the United States in the face of China's strategic countermeasures, as well as the inevitable failure of the chaotic measures of unilateral trade bullying.

Extended reading

American Farmers: Even if China agrees to buy American soybeans and daylilies are still cold

Soybean stocks are starting to pile up as the U.S. fall harvest season gets underway. Government data shows that the new season of soybean exports from the United States has started, but there are no records of sales or shipments to China, which is in stark contrast to the 6.5 million tons booked in the same period last year.

¡°The number one U.S. exporting agricultural products overseas sales dropped sharply, and China¡¯s refusal to buy U.S. soybeans caused a ¡®destructive¡¯ blow to U.S. farmers.¡±The Financial Times on September 27 that more than half of the U.S. soybeans are exported to China, while China is the world¡¯s largest buyer.But this year, because China and the U.S. are still in trade negotiations, no single U.S. soybeans are sold to the east, causing soybeans to be full and prices to fall, making it difficult for farmers to maintain their livelihoods.

¡°We¡¯re in a hurry,¡± said Darin Johnson, chairman of the Minnesota Soybean Growers Association and fourth-generation farmer, ¡°even if we finally reach an agreement (with China), we can¡¯t catch up with this year¡¯s harvest season.¡±

American farmers are harvesting soybeans video screenshot

Primarily used as livestock feed, soybeans can also be used in industrial and consumer manufacturing. By-products such as soybean oil can be used to make everything from biofuels to fire-suppressing foams. At present, the oversupply of soybeans has caused prices to fall. At the same time, due to tariffs, the cost of inputs such as fertilizers is also rising.

Since Trump returned to the White House to impose high tariffs on Chinese goods, China has immediately launched countermeasures, including a suspension of purchases of U.S. soybeans, which has caused huge losses to U.S. middle-western farmers and even threatened some of the family farms that inherited many generations.

The U.S. New York Times on September 25 stressed that since May this year, China has not purchased any American soybeans, and according to the British Economist, the U.S. official records can be traced back to 1998, which is the first time in 30 years that China has not purchased any American soybeans.

In addition to the economic blow, this procurement disruption also has political implications-soybean farmers are a key voter group in the United States, which makes the trade dispute a flashpoint of conflict with national impact.

¡°An agricultural downturn will directly impact our small rural communities,¡± Johnson of Minnesota said, adding: ¡°This directly impacts rural areas in the United States and the small towns I live in.¡±

On September 25, local time, U.S. President Trump told reporters at the White House Oval Office that he was considering launching an agricultural aid scheme that plans to subsidize part of the tariff income to affected farmers, ¡°We will take out part of the tariff money and distribute it to our farmers... That¡¯s not a lot in terms of the total, but it¡¯s not a small amount for farmers.¡±

He also referred to the current phase as a ¡°transitional phase,¡± trying to reassure farmers that ¡°they will be affected in the short term before tariffs ultimately benefit them.¡±

U.S. soybeans sales to China change, U.S. New York Times map

The Financial Times noted that the so-called ¡°agricultural aid plan¡± proposed by Trump, American farmers are not unfamiliar with this ¡°painting cake¡±.

In 2019, Trump also insisted on provoking a tariff dispute against China during his first term in office, with China subsequently cutting imports of soybeans from the United States. At that time, the Trump administration launched a $23 billion ¡°farmer aid program¡± and the biggest beneficiaries of Petrobras were Brazilian farmers.

¡°The last time the U.S. did so, we lost about 20% of our market share to Brazil and never got it back,¡± said Todd Main of the Illinois Soya Association.

This time, Chinese buyers once again almost completely turned to the South American market, bringing Brazilian soybean exports to a new high. From January to August this year, Brazil exported 66 million tons of soybeans to China, accounting for three-quarters of its total soybean exports, according to government data.

Scott Gerlt, chief economist at the American Soybean Association, said that while the federal bailout may help in the short term, it can't make up for the permanent market share loss caused by expansion elsewhere.

"Farmers are under tremendous financial pressure, and the longer China doesn't return to the market, the greater that pressure will be." Bankruptcies on U.S. farms are already on the rise, he added.

Nick Levendowski, head of the Kansas Farmers¡¯ Union, told Kansas City local media KSHB that the local agricultural economy is in trouble and farmers can¡¯t wait.

"Farmers are on the brink of collapse, and this administration says, 'Just wait,'" Levendowski said. "Farmers don't have time to wait. Farmers need immediate action from the White House, USDA, the Office of the Trade Representative and Congress... Time is not on our side."