How U.S. Trade Tariffs and Funding Freezes Are Shaking the Foundation of the Recycling Industry

Rahman Hasidur, JadeTimes Staff

R. Hasidur is a Jadetimes news reporter covering USA

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Have you ever wondered what happens to your plastic bottles, cardboard boxes, or aluminum cans after tossing them into the recycling bin? You might be surprised to learn that the journey of these everyday items is closely intertwined with global economics, trade policies, and even political decision making. In recent times, the U.S. recycling industry has been thrust into uncertainty due to escalating trade tariffs and funding freezes introduced by former President Donald Trump.

Image Source: Brendan Smialowski

An Industry Already on Shaky Ground

The U.S. recycled materials industry has long battled market fluctuations, a decline in international buyers, and the rising affordability of virgin plastic and glass production. But recent policy shifts are adding fresh turbulence to an already unstable landscape.

The Recycled Materials Association, a Washington based organization representing this sector, warned that new tariffs are disrupting the critical manufacturing and recycling processes that depend heavily on recycled inputs. These tariffs some reaching as high as 10% were aimed at countries with significant trade imbalances with the U.S. Initially announced to take effect, they were soon paused but raised further against China, creating additional uncertainty.

Meanwhile, federal spending freezes have derailed significant infrastructure projects, such as a $300 million plastics recycling plant in Erie, Pennsylvania one of the largest of its kind in the world.

Tariffs and Trade Wars: A Direct Hit on Recycling

The recycling industry isn’t just about curbside pickups of bottles and boxes it includes high value scrap metals such as aluminum and steel, which are essential for domestic manufacturing.

China's 2017 ban on nonindustrial plastic imports from the U.S. already shook the market. Since then, the sector has struggled to find equally large buyers for its recyclable materials. In 2023, China still remained the third largest buyer, importing $2.46 billion worth of recycled materials from the U.S.

New tariffs and retaliatory trade measures threaten this fragile export network. According to the Recycled Materials Association, the industry supports nearly 600,000 American jobs and helps reduce the national trade deficit. Any disruption to international markets could cause ripple effects across the supply chain, from local collection facilities to international buyers.

A Devastating Blow: Canceled Projects and Lost Job

In Erie, Pennsylvania, a promising recycling facility by the International Recycling Group was set to process plastics on an unprecedented scale and create hundreds of local jobs. But due to a federal loan freeze linked to a directive under Trump’s administration to halt spending from the Inflation Reduction Act and Infrastructure Improvement and Jobs Act the project was scrapped.

Mitch Hecht, CEO of the International Recycling Group, cited tariffs on equipment and the loss of federal loan guarantees as key reasons behind the cancellation. “Personally devastated,” Hecht’s sentiment was echoed by the Erie Regional Chamber, which voiced frustration over economic uncertainty at the federal level.

Can Domestic Markets Provide Hope?

Despite the setbacks, some industry leaders remain cautiously optimistic. Professor Shelie Miller of the University of Michigan points out that the cost of producing new metals remains high, making recycled metal markets relatively stable. However, plastic and glass are cheaper to produce fresh, making it harder for recycled alternatives to compete especially when costs rise due to tariffs or funding challenges.

On a brighter note, if raw materials become more expensive because of trade wars, recycled materials may become more appealing domestically. Moreover, Trump’s push for onshore manufacturing could stimulate demand for recycled steel and aluminum 70% of which already comes from recycled content.

What This Means for the Future of Recycling

The U.S. recycling industry sits at a critical juncture. While international trade policies, federal funding freezes, and market instability present serious obstacles, the shift toward domestic manufacturing and sustainable sourcing could create new opportunities for growth and innovation.

To ensure the industry thrives, policymakers must recognize the essential role recycled materials play in both environmental sustainability and economic development. Supporting infrastructure, protecting export pathways, and encouraging the use of recycled inputs in manufacturing are key steps to ensuring that what we toss in the blue bin continues to make a meaningful difference.

Conclusion: Why This Matters

So, what do we get to understand from all of this?

The journey of a recycled bottle or can isn’t just about waste management it's deeply connected to jobs, trade balances, international diplomacy, and green innovation. The future of American recycling depends on more than local participation; it hinges on smart policies, stable markets, and an appreciation for the economic value of sustainability.

Let’s keep watching, questioning, and supporting the systems that make recycling work not just for our environment, but for our economy too.