Trump administration’s tariff on the imported aluminium and steel and the counter tariff by China on scrap imported from the US are going to have an effect on US scrap recycling sector. Jeff Padnos, the CEO of Holland, Michigan-based scrap recycling firm Padnos points to China’s aluminium scrap tariff, among other aspects of trade disputes which is concerning scrap recyclers in the US. He pointed out several detrimental effects of the growing global trade dispute during an interview.
In the interview with National Public Radio (NPR), Padnos pointed that China’s 25 per cent tariff on imported aluminium scrap and its sudden decision to halt inspections in the US has affected his family business.
“We still have some material that we shipped that has not been able to clear through and get to the customer, so that's created a lot of uncertainty,” Padnos told NPR.
He said that the company is looking at new market to ship its scraps but added that it would be hard to find a market which can substitute China.
Padnos is also concerned that the trade disputes could affect its supply of factory scraps. If customers who process steel or aluminium find it is more cost-effective to import finished goods rather than making them in-house paying 10 or 25 per cent import duty on raw materials, it will lead to a drop in the supply of factory scrap.
Padnos urged diplomats in both the United States and China to consider the interests of the small and medium size downstream players and scrap recyclers. He cited a metaphor offered by pundit George Will who said tariffs are like “putting up a blockade on your own country. Historically, when you put a blockade on someone, it was considered an act of war. In a way, it’s like an act of war on ourselves.”
He added that China needed aluminium scrap since it helped companies recover aluminium at a lower cost with minimum carbon footprints. He said the tariff on scrap “works directly against [China’s] own environmental goals.”
Responses
