The USA is a great believer in free trade and while the tariff situation isn’t perfect – there are more obstacles to trade than there should be – it’s a lot more flexible than many other countries. Where there are tariffs they’re usually aimed at restricting certain imports to protect key US industries. There’s one field where other countries’ export tariffs are creating obstacles to some fast-growing US companies though, and that’s recycling. Now the International Trade Commission is leading a drive to lower regulatory barriers on shipments of high-value scrap.
An advanced economy like the USA produces a lot of waste that’s loaded with potentially valuable materials. Often it’s not economical to reprocess it here, but it has a substantial value to the right buyer. In 2013 the USA exported nearly 43 million tons of scrap, including old electronic devices, steel-rich scrap and plastics. As well as keeping it out of US landfills these exports earned $24 billion, but that sum could have been a lot more if companies didn’t face so many tariffs and over-zealous regulations.
The USA already has reciprocal agreements with many countries that ease the shipping of recycling, because it’s recognized that the trade in scrap has many economic and environmental advantages. It might seem counter-intuitive to use energy and shipping space hauling trash abroad, but if the alternative is it being buried or incinerated there’s a significant environmental gain. Recycling facilities aren’t evenly distributed either; there are specialist plants in the USA that import waste from abroad and process it into valuable materials, for example. At the same time much US scrap can be reclaimed more efficiently at foreign plants, such as consumer lamps and flat screens – although that’s changing as BLUBOX sites open in the USA.
Of course that’s another point – as well as waste, recycling equipment itself is a valuable component of international trade and it’s to everyone’s advantage to keep that trade as free as possible. After all if recycling technology becomes more widespread then more waste can be reprocessed. Trade agreements cover equipment including shredders, balers and magnetic separators. There are some serious gaps in the agreements, though.
Now the International Trade Commission is investigating the impact of tariffs and looking at ways to persuade other governments to ease or remove them. Last year US companies exported billions of dollars’ worth of scrap iron and plastic, plus millions of tons of paper and fiber destined for recycling. Out of the ferrous scrap $700 million was subjected to import duty, and for paper waste that figure was $300 million. The recycling industry is increasingly competitive and excessive tariffs can make it uneconomical to export; profit margins are often thin and faced with the extra charge many companies will just give up on the idea of operating internationally. The ITC sees a significant opportunity to improve the balance of trade and ease the US landfill situation at the same time; the solution is to persuade other countries to match the US policy of not charging tariffs on imported scrap. It’s a simple solution and if governments can be persuaded to sign up to it a valuable, environmentally friendly business sector could grow enormously.