By FRANK WATSON
Contributor 

Recycling gains from tariffs offers lesson for other industries

Guest Commentary

 

Last updated 6/6/2019 at 8:23am



The first law of economics is Murphy’s Law. The second, right behind Murphy, is the Law of Unintended Consequences, which says: “Any outside input into the free market tends to disrupt its normal flow.”

The free market can be visualized as an intricate web of connections, kind of like a spider’s web. The spider can feel a fly at the very extreme edge of the web and reacts to secure a meal. The market also feels the slightest outside influence and reacts in ways that can only be predicted in hindsight. More often than not, the reaction has a negative result. On rare occasion, however, the reaction can actually be beneficial.

China’s manipulation of international trade is a restriction of the free market and puts America at a disadvantage. Our president vowed to right this wrong and imposed tariffs on Chinese goods. Not to be outdone, China imposed stiff tariffs on American goods. The resulting trade/tariff war is raising havoc with our economy.

Our manufacturers find the prices rising on Chinese parts and supplies. Our farmers are in jeopardy of losing a large portion of their markets. Our hope is for these negative impacts to be short term, and we will realize some unknown long term benefit. One unintended consequence, however, is breathing new life into our recycling industry.

China is a master at creating advantages for itself. A few years ago, we had a growing recycling program. The backbone of our efforts was a system of regional sorting centers. Buyers were specialized in that one would buy metals, another would buy newsprint, another cardboard, glass, etc.

Your recycling bin had to be sorted to accommodate the buyers. Then China offered to buy all our recyclable material. Just bale it all up and ship it to them. This new concept was promoted in Eastern Washington as “single stream recycling.” Once our old system of sorting centers was abandoned, China refused to accept glass. This negated the single stream benefit. We had to sort out the glass before we baled the rest for shipment.

China was in the process of adding additional restrictions when the trade war began and high tariffs were imposed on all recyclable material. This would seem to be a negative consequence, but it actually turned out otherwise. With tariffs, the domestic price of recyclable material plummeted. American processors were able to obtain material at bargain prices and our national recycling program is being reborn. The free market works and produces a win for the home team. Yea!

Is it possible we learned something from this experience? If we can rebuild our fledgling industry to repurpose usable castoffs, why can’t we do the same with other industries? Blue jeans were once as American as the Fourth of July parade. We closed our last U.S. plant in 2003.

Levis, phones, Scripto pens, the socks you have on and Girl Scout uniforms are all made in China. Tariffs will drive up the cost of all Chinese made products. Bad news for American consumers, but if American entrepreneurs take this opportunity to retool and automate their plants, it may be a rebirth of American industry. It would be nice to be able to “buy American” again.

Frank Watson is a retired Air Force Colonel and long-time resident of Eastern Washington. He has been a free-lance columnist for over 19 years.

 

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