Situation Review for U.S. Tariff, Chinese 25% Levy in Regards to Recycled Paper Pulp
China placed what has become known as a well known levy on recycled paper pulp. While not as well known, the 25% tariff could strongly impact the larger, internationally market connected recycling industry in the U.S.
China’s latest round of retaliatory tariffs against the U.S., announced in August, 2018, includes a specific definition: "recovered fiber materials," basically, the paper, newspaper and corrugated / paper containerboard that the U.S. firms complaining currently want to successfully and profitably recycle without this process opponents have deemed a "trade war" should have to continue much longer. Trucks and truckers have key jobs rooted in the need to collect paper, bundle it at local centers and sell it as bales, where it has in recent history been bound mostly to China, to be incorporated into new products. It’s the cycle of recycling.
And now there’s a tariff on those exports, another cost for an industry already weakened by China’s announcement in January that it no longer would import most plastics and certain other recycled goods from the U.S. The tariff was put in place the day the Trump administration imposed additional duties on Chinese imports.
China also has placed a levy on recycled paper pulp. While not as well known outside the industry, the 25% tariff could seriously affect revenue of the recycling industry in the U.S. China’s latest round of retaliatory tariffs against the U.S., announced in August, includes something called "recovered fiber materials," basically, the paper, newspaper and cardboard that we put in the recycle bin. Trucks collect paper, bundle it at local centers and sell it as bales, mostly to China, to be incorporated into new products. It’s the cycle of recycling.
The tariff on China was put in place the day the Trump administration imposed additional duties on Chinese imports, meaning the costs are not only to the U.S. and hopes remain that the mutual escalation in profit-reducing tensions is something that will not last long enough to at least repair the current relationship. Although it's unknown if the U.S. move has gained leverage, there is definitely been a negative affect on the Chinese industry.
U.S. Reasoning for Tariffs
"China’s economy has been booming for so long," Peters said, "that they developed a huge appetite for our recycled materials so they could turn it into new products and then ship them overseas to us in their shipping containers. And then the next thing you know, it was like 40 percent of U.S. recyclable paper was going to China. And this continued for many, many years."
Trade between the two countries is not even. Last year, China’s exports of goods and services to the U.S. totaled about $500 billion, which dwarfs China’s imports from the U.S., which totaled about $150 billion.
Mutual U.S. - ChinaTrade Relationship Bottom Line
"In time," Peters said, "it’s going to take time, probably maybe several years, if China does not go back to buying, it’s going to take several years for demand and supply to get matched back up again to where the price of mixed paper and newspaper goes back up."
This story is selected as part of Elemental: Covering Sustainability, a new multimedia collaboration published online this past month (July 2018) between Cronkite News, Arizona PBS, KJZZ, KPCC, Rocky Mountain PBS and PBS SoCal. Legislative sectioned reports that are reflective of policy or opinion of policy are edited of bias if no more informative / more recent journalism is found on any particular industry relevant political (legislative) subject. Any remaining statements are for industry informational purposes and do not necessarily reflect the views of TAPPI as an association, any individual associated, or speak for association members.
TAPPI
http://www.tappi.org/