As President Joe Biden gears up for imposing new tariffs on China, a US soybean trade group is advocating for higher levies on Chinese used cooking oil, claiming it is undercutting American crops used in biofuels production.
The National Oilseed Processors Association (NOPA), representing major US soybean processors like Cargill Inc., Bunge Global SA, and Archer-Daniels-Midland Co., is urging for levies higher than the current 15.5% rate. A notice from NOPA to its members, seen by Bloomberg, revealed this push for increased tariffs on Chinese used cooking oil.
Kailee Tkacz Buller, the CEO of NOPA, mentioned that the association sent out a memo in response to rumors of potential additional tariffs on used cooking oil. The members of the association are in favor of raising the levies to align with other clean energy sources such as electric vehicles and solar to ensure fair competition, as stated by Buller in an email communication.
Concerns among soybean crushers have risen due to a surge in imports of used cooking oil from China, which is dampening the demand for US crop-based ingredients used in the production of renewable diesel and sustainable aviation fuel. There are speculations, albeit unconfirmed, that the imported oil from Asia might be adulterated with fresh vegetable oils like palm, potentially distorting commodity values and undermining US biofuel regulations.
Chinese exports of processed animal and vegetable fats and oils, including used cooking oil, to the US stood at $201 million in the first quarter of this year, compared to $770 million for the entire 2023, based on Chinese customs data compiled by Bloomberg. This is a significant increase from the approximately $47 million worth of shipments in 2022 starting from April when the data was first recorded.
Although soy oil values have declined this year, there has been a recent uptick in Chicago futures trading as market participants await news on tariffs. President Biden is anticipated to announce an increase in certain levies initially imposed during the tenure of former President Donald Trump. The specifics of the announcement, including the inclusion of used cooking oil, remain undisclosed.
Amid these developments, the White House has chosen not to provide any comments. The potential imposition of tariffs on Chinese used cooking oil would be part of broader US trade actions against Chinese goods, with plans to quadruple tariffs on Chinese electric vehicles and raise levies on other critical industries.
