tl;dr
U.S.-China trade tensions escalate as Trump accuses Beijing of an 'economically hostile act' after soybean purchases halt, triggering market volatility and retaliatory measures across agriculture, shipping, and energy sectors.
**Trump Accuses China of "Economically Hostile Act" as Trade War Intensifies**
U.S. President Donald Trump has escalated tensions with China, accusing Beijing of committing an “economically hostile act” after the country halted purchases of American soybeans, a move that has sent shockwaves through global markets and deepened an already fraught trade conflict. The dispute, which has spilled into agriculture, shipping, and energy sectors, underscores the escalating economic warfare between the two global powers.
**A Soybean Crisis and Trump’s Threats**
Trump took to his social media platform, Truth Social, to condemn China’s decision to stop buying U.S. soybeans, a critical export for American farmers. “I believe that China purposefully not buying our Soybeans, and causing difficulty for our Soybean Farmers, is an Economically Hostile Act,” he wrote. He hinted at retaliatory measures, including potentially cutting ties with China over cooking oil and other trade sectors, asserting that the U.S. could produce cooking oil domestically.
China had long been the largest buyer of U.S. soybeans, importing 27 million metric tons valued at $12.8 billion in 2024. However, since May, Beijing has refused to purchase a single shipment, reportedly due to rising tariffs that have made U.S. imports less attractive. Instead, China has turned to Argentina and other South American suppliers. The timing of the soybean ban coincided with a $20 billion U.S.-Argentina currency swap and President Javier Milei’s visit to Trump, raising questions about strategic alignment.
**Market Volatility and Escalating Rhetoric**
Trump’s public rebuke of China sent global markets into a tailspin. The S&P 500 plummeted after a volatile session, as investors braced for further trade tensions. Earlier in the week, Trump had threatened to impose a 100% tariff on Chinese goods starting November 1, though he later softened his tone, tweeting, “Don’t worry about China, it will all be fine!”
The rhetoric has fueled uncertainty, complicating ongoing trade talks between Washington and Beijing, which have stalled amid months of retaliatory measures. Meanwhile, data revealed that China’s exports of used cooking oil hit record highs in 2024, with the U.S. accounting for 43% of the total—a figure that further irked Trump as he considered severing cooking oil trade ties.
**China Fights Back with Maritime Countermeasures**
In response to U.S. trade policies, China introduced special port fees on vessels owned or operated by U.S. companies, mirroring a similar policy by the Trump administration targeting China-linked ships. The move, which applies to a vessel’s first port of entry or up to five voyages annually, aims to bolster China’s shipbuilding sector and counter U.S. efforts to curb Beijing’s dominance in global shipping.
The tit-for-tat measures have created a “spiral of maritime taxation,” according to Athens-based Xclusiv Shipbrokers, threatening disruptions to global freight flows. Shipping analysts warned that carriers like Maersk, Hapag-Lloyd, and CMA CGM are rerouting vessels to avoid Chinese ports, while U.S. shipowners are scrambling to sell cargo mid-voyage. Industry groups had previously criticized the U.S. port fees, arguing they would raise costs for consumers and exporters.
**Sanctions and Geopolitical Fallout**
China’s retaliation extended beyond tariffs, with the Commerce Ministry stating, “If the U.S. chooses confrontation, China will see it through to the end; if it chooses dialogue, China’s door remains open.” Hours later, Beijing imposed sanctions on five U.S.-linked subsidiaries of South Korea’s Hanwha Ocean, accusing them of supporting a U.S. investigation into China’s trade practices. Hanwha’s stock plunged nearly 6% following the announcement.
The escalating conflict has raised concerns about broader economic fallout. Analysts estimate that China’s state-owned shipping giant COSCO could face nearly half of the $3.2 billion in additional costs projected by 2026. Meanwhile, the U.S. Trade Representative has remained silent on the potential impact of the port fees, as pressure mounts from agriculture and energy sectors.
**A Deepening Divide**
As the trade war intensifies, the stakes for global markets and supply chains grow higher. With both sides doubling down on retaliatory measures, the path to resolution remains unclear. For now, the clash between the U.S. and China shows no signs of abating, leaving businesses and investors navigating a landscape of uncertainty and escalating tensions.