President Donald Trump’s comments regarding the U.S. producing its own cooking oil in retaliation against China’s refusal to purchase American-grown soybeans led to a rout in the equity markets within a matter of minutes.
$450 Billion Erased In 7 Minutes
On Tuesday, in a post on X, The Kobeissi Letter highlighted the massive pullback in equity markets during the day, following Trump’s latest trade threat.
See Also: Trump’s Trade War Gambit: Why America May Lose More Than China in Tariff Escalation
“The stock market just erased -$450 billion in 7 minutes,” the post said, adding that it was because “Trump threatened to start producing cooking oil in the US.”
After ending the day in the red, all major indices futures are up Tuesday evening, with S&P 500 futures up 0.17%, or 11.50 points at 6,698.00, followed by Nasdaq futures at 24,816.25, up 0.22%, or 55.25 points, and finally Dow Futures, up 0.11%, or 52 points, trading at 46,552.00.
‘Beijing Will ‘See This As Weakness,’ Says Expert
This comes right after Trump’s post on Truth Social, where he accused China of “purposefully not buying our Soybeans, and causing difficulty for our Soybean Farmers,” which he termed as an “Economically Hostile Act.” As a result, he said that his administration was considering eliminating trade with China involving cooking oil.
“We can easily produce Cooking Oil ourselves, we don't need to purchase it from China,” Trump said.
Political scientist Rush Doshi, an assistant professor at Georgetown University and Director of the China Strategy Initiative, termed Trump’s threats as being weak.
“Soybeans weren’t the hostile act; the unprecedented rare earth licensing regime was,” Doshi said, in a post on X, adding that he wasn’t sure if Trump was trying to “win” the trade war with China, since “Beijing will see this as weakness.”
Entrepreneur Arnaud Bertrand echoed similar concerns and said that Trump’s threats were “pretty inconsequential” for China.
He said that the cooking oil from China that “Trump just threatened he wouldn’t buy,” was, in fact, used cooking oil, or “gutter oil.”
According to Bertrand, “Chinese companies were actually asking the government to put in place export restrictions on the product as Chinese domestic demand for it already far exceeds the country’s production capacity.” As a result, he adds, “Trump’s threat to ban imports of it is pretty inconsequential.”
According to data from S&P Global, China exported 2.951 million metric tons of used cooking oil in 2024, with the U.S. being its single biggest importer at 1.267 million metric tons.
Oilseeds Stock Soars After Hours
Trump’s post sent Australian Oilseeds Holdings Ltd. (NASDAQ:COOT) soaring by 46.21% on Tuesday, and another 248.19% in after-hours trade.
Other agricultural biotech stocks posted similar rallies, with Origin Agritech Ltd. (NASDAQ:SEED) jumping 92.33% after hours and Arcadia Biosciences Inc. (NASDAQ:RKDA) up 53.28%.
According to Benzinga’s Edge Stock Rankings, Australian Oilseeds scores poorly on Momentum and Value, but has a favorable price trend in the short and medium terms. Click here for deeper insights into the stock, its industry and competitors.
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