Is Trump fighting the wrong battle with his tariffs?

We think everybody will agree that while tariffs are important to have, the motives behind Trump’s tariff war are very questionable when you take everything into consideration…

Trump’s tariffs are based on the notion of a linear economy – the complete opposite of the circular economy that we remanufacturers are trying to achieve. Trump sees the trade gap or “trade deficit” as money lost (the difference between the amount the U.S. imports and the amount it exports), whereas most economists don’t see it this way.  When a new product such as a toner cartridge is made in China, raw materials are dug up to be used and then sent to a factory where they’re turned into a finished product and then shipped to the States. Money therefore leaves the U.S. economy and flows to China where the product is made, which creates the trade deficit that Trump is so desperate to reduce. In the long-term, American money goes to a foreign economy and they are left behind with waste, until they pay yet another economy to take the waste away, and follow up by buying another imported product. So it sounds as if Trump’s tariffs are the perfect solution to this problem! Not at all…

In America only 9% of plastic is reused or recycled each year while 79% is sent to landfills and 12% is burned, so perhaps Trump should be more concerned with what measures they could be introducing to quell the amount of plastic waste they currently have (cough, cough, remanufacturing!). Maybe he could do it in one of his influential tweets that he likes to use every now and then…

 

Will the U.S. fall even further behind?

With Trump fixated on reducing imports rather than focusing on raising awareness of the benefits of the remanufacturing industry, the U.S. risk falling even further behind countries that embrace remanufacturing and the circular economy. Ultimately, focusing on a circular economy would help the U.S. to reduce both waste AND imports, which ticks one of Trump’s boxes and provides an additional benefit; less imports would be needed as more products would be available within the American economy through remanufacturing.

The only thing that Trump’s tariffs do is reduce the amount of imports BUT the amount of waste will stay the same, so while Trump’s insistence on a linear economy will help to reduce the dreaded trade deficit, waste will still remain an issue while remanufacturing is overlooked. It seems as though the only thing that Trump has managed to accomplish is the creation of another enemy when it comes to trade.

Feel free to give us your thoughts on how the market may change as a result of Trump’s tariffs! blogs@ecs-uk-ltd.co.uk