As President Joe Biden prepares a new wave of tariffs against China, a US soybean trade group is pushing for higher tariffs on Chinese-used vegetable oil, which it says undermines American crops used to make biofuels.
A group representing the largest U.S. soybean processors, including Cargill Inc., Bunge Global SA and Archer-Daniels-Midland Co., wants tariffs higher than the current 15.5%, the National Oilseed Processors Association said in a notice. or NOPA, sent to its members over the weekend, which was spotted by Bloomberg.
General Director of NOPA Kaylee Tkach Buller said the memo was sent in response to rumors of possible additional tariffs on used cooking oil. Association members support the expansion on par with other clean energy sources such as electric vehicles and solar energy to level the playing field, Buller said in an email.
Soybean processors are concerned about the influx of used vegetable oil imports from China. weakening demand for ingredients from U.S. crops that can be used to produce renewable diesel and clean aviation fuel. There is also widespread unconfirmed speculation that waste oil from Asia may not be genuine and is instead mixed with fresh vegetable oils such as palm, potentially distorting the value of goods and undermining U.S. biofuel laws.
China’s exports to the United States of processed animal and vegetable fats and oils (a category that includes used cooking oil) reached $201 million in the first three months of this year, up from $770 million for all of 2023, Chinese customs data compiled by Bloomberg show. . . That compares to about $47 million in deliveries in 2022, starting in April when data starts.
Soybean oil prices have been lower so far this year, although futures in Chicago have risen over the past couple of trading days as commodity traders await news on tariffs. Biden is expected to unveil on Tuesday. increase in some fees first introduced under former President Donald Trump. It is unknown whether the announcement will feature used cooking oil.
White House officials declined to comment.
Tariffs on used cooking oil would complement other new U.S. trade measures against Chinese goods. Biden will quadruple tariffs on Chinese electric vehicles and sharply increase levies on other key industries, Bloomberg News reported this week. Semiconductors were another key battleground.
The 2024 presidential race is critical to these moves as Biden tries to crack down on China and differentiate himself from Trump. It comes amid disagreements between the world’s two largest economies over a host of issues including espionage, Beijing’s crackdown on Hong Kong and the status of Taiwan.
Amid the vegetable oil crisis, U.S. producers of soybeans and other crops that used to produce renewable diesel have the most to lose from the trade turmoil, agricultural traders say. This sets the stage for possible tension between farming groups and biofuel producers who make money by importing used cooking oil from China.
Imports of used cooking oil into the United States more than tripled in 2023 from a year earlier, with more than half coming from China, according to the U.S. International Trade Commission. The surge is cutting into profits for processors who crush whole soybeans to make oil, forcing some plants to slow down.
The increase in imports also threatens plans to expand U.S. refining capacity amid a flurry of government incentives aimed at producing low-carbon fuels to combat climate change.
According to the memo, NOPA plans to discuss the tariff issue with members this week and also consider other possible options.