The Ripple Effect: How US Tariffs Could Reshape Recycling and Waste Management

The U.S. recycling and waste industry is bracing for potential turbulence as new tariffs on materials like steel, aluminum, copper, and plastics loom. While these policies aim to boost American manufacturing, they risk destabilizing recycling markets, disrupting global partnerships, and undermining progress toward a sustainable economy. Here’s what’s at stake—and why clarity and collaboration are critical.

1. Tariffs Could Worsen Price Swings in Recycling Markets

Recycled materials are traded globally, so tariffs on imports (or retaliatory tariffs on exports) could trigger price chaos.

• Paper and Cardboard:
  Prices for recycled cardboard (OCC) recently stabilized after years of volatility, but tariffs on imported containerboard from Canada and Mexico—which supply 31% of U.S. imports—could reverse this trend. Domestic mills might temporarily benefit, but higher costs for manufacturers could reduce long-term demand. Past tariffs on steel in 2018 caused similar short-lived gains, followed by market stagnation.

• Metals:
  The U.S. exports 40% of its scrap metal, with Turkey, India, and China as major buyers. Tariffs on foreign metals might encourage domestic use of recycled steel and aluminum, but if trading partners retaliate (as the EU did in 2018 with tariffs on U.S. paper), recyclers could face plummeting exports and oversupply at home.

• Plastics:
  The U.S. imports 18% of its PET plastic resin from Mexico. Tariffs here could make recycled plastic even less competitive against virgin plastic, which is already 20–30% cheaper due to oil and gas subsidies. This would hurt companies working toward goals like the U.S. Plastics Pact’s target of 30% recycled content by 2030.

2. Domestic Recycling Infrastructure: High Hopes, Big Hurdles

Tariffs might sound like a push for U.S. self-reliance, but building recycling capacity is easier said than done.

• Learning from China’s National Sword:
  After China banned scrap imports in 2018, U.S. plastic recycling rates dropped by nearly half, exposing reliance on foreign buyers. While domestic processing grew slightly, gaps remain—especially for plastics, where only 28% of PET bottles are recycled today.

• Costs and Risks:
  Building a recycling facility costs 10–10–30 million, with profits often taking a decade to materialize. Tariff uncertainty could scare off investors. For example, the aluminum industry needs $2.2 billion to meet climate goals—funds that may vanish if trade wars escalate.

• Small Recyclers Could Lose Out:
  Many local recyclers operate on thin 3–5% profit margins. Higher costs from tariffs might force them to shut down or sell to larger competitors, reducing market diversity and innovation.

3. Canada and Mexico: Unseen Partners in U.S. Recycling

North America’s recycling system relies on cross-border trade:

• Key Connections:

  • Canada buys 12% of U.S. recycled cardboard.

  • Mexico imports 600,000 tons of U.S. plastic scrap yearly.

Tariffs could disrupt these flows. For example, if Mexico slaps tariffs on U.S. cardboard in retaliation, prices could drop by 15-20% per ton, forcing recyclers to landfill materials they can’t sell.

4. Policy Clashes: Tariffs vs. Sustainability Goals

Tariffs could clash with environmental priorities:

• Global Waste Rules:
  The U.S. isn’t part of the Basel Convention, a treaty restricting waste exports. Tariffs might further strain relationships with countries pushing for stricter global recycling standards.

• States Might Take Charge:
  If federal policies fall short, states like California and Maine could expand their own laws, such as requiring companies to fund recycling programs or use more recycled materials. But inconsistent state rules could create a patchwork system that’s costly for businesses.

5. A Path Forward: Smart Policies to Limit Harm

To protect recycling while supporting U.S. manufacturing, policymakers should:

1. Exempt recycled materials from tariffs to avoid punishing green industries.

2. Boost demand for recycled goods through laws like California’s rule requiring 50% recycled plastic in bottles by 2030.

3. Fund infrastructure upgrades, such as tax breaks for recycling plants.

4. Partner with Canada and Mexico to keep cross-border recycling trade smooth.

The Bottom Line

Tariffs risk solving one problem by creating another: shielding U.S. factories while harming recyclers. For an industry already struggling with low profits and aging infrastructure, this could mean fewer jobs, more waste in landfills, and slower progress toward sustainability. The solution? Pair trade policies with recycling investments and global cooperation. Otherwise, the U.S. might win a trade battle but lose the fight for a cleaner future.

By the Numbers:

• U.S. recycling employs over 500,000 people.

• Only 6% of U.S. plastic waste is recycled today.

• Scrap metal exports generate $30 billion annually.

Clear policies, not trade wars, will keep recycling viable—for the economy and the planet.