Although on-again, off-again tariffs may exclude resin shipments, market players are seeing no shortage of confusion and consternation. | Avigator Thailand/Shutterstock[/caption]
After many weeks of shifting narratives and uncertainty, participants in recycled polymer markets are working to navigate a constantly shifting tariff environment, in which buyers and sellers as well as customs officials struggle to align federal mandates with on-the-ground implementation.
Adding to the upheaval, President Donald Trump again paused most "reciprocal" tariffs the afternoon of April 9, this time for 90 days, though duties for Chinese imports rose further, to 125%.
Leading up to the latest reversal, Trump enacted steep tariffs on goods from most other countries on April 2, citing inequities in trade relationships. Although Trump has maintained his commitment to tariffs since his inauguration on Jan. 20, throughout February and March he threatened, delayed, imposed and suspended various measures – in the process removing any semblance of calm from commodity buyers and sellers alike.
Traders who do business with Asia are looking for clarity from customs authorities in Hong Kong and other major Asian ports, said Steve Wong, CEO of Fukutomi Recycling, in an interview with E-Scrap News before the 90-day pause was announced. Fukutomi is a large global trader of recycled plastics.
Wong said some companies could send material through countries with lower duties, such as Malaysia and Canada, to offset the steepest of the tariffs. But he was unsure whether the Chinese government would look the other way in such instances, or would ask for the actual origin.
Nevertheless, while global demand for post-consumer plastics has been subdued in recent months, amid lackluster consumer spending, appetite for engineered plastics such as PS and ABS has been consistent. "These are still selling very well," he said.
The lack of clarity also is forcing market players to interpret the regulations to the best of their ability. For example, commodity brokerage Cellmark believes its North American commodities are covered under the U.S.-Mexico-Canada Agreement, said James Derrico, vice president of new business. The Recycled Materials Association has stated that recycled material imports into the U.S. from Canada and Mexico qualify for the USMCA tariff exemption, provided they were collected in North America and that the importer goes through a process of certifying the material's origin.
"We think it's likely that most of these plastics are excluded, and at least Canadian and U.S. businesses excluded," Derrico said.
"But even with the reciprocal tariffs, we're not sure how that will affect the plastics market, exports out of the U.S. from what other countries are going to do," he said.
Unsurprisingly, neither buyers nor sellers are keen to pay more, Derrico said. However, after being stung by the previous round of tariffs in 2018-2019, all of Cellmark's supply contracts now include clauses to account for tariffs, he said, though the majority of the company's business is done on a spot basis.
"In situations like that, I do feel that you probably will see (paying the tariff) fall onto the broker or the shipper of record," Derrico added.
[caption id="attachment_9430" align="aligncenter" width="1200"] Although on-again, off-again tariffs may exclude resin shipments, market players are seeing no shortage of confusion and consternation. | Avigator Thailand/Shutterstock[/caption]
After many weeks of shifting narratives and uncertainty, participants in recycled polymer markets are working to navigate a constantly shifting tariff environment, in which buyers and sellers as well as customs officials struggle to align federal mandates with on-the-ground implementation.
Adding to the upheaval, President Donald Trump again paused most "reciprocal" tariffs the afternoon of April 9, this time for 90 days, though duties for Chinese imports rose further, to 125%.
Leading up to the latest reversal, Trump enacted steep tariffs on goods from most other countries on April 2, citing inequities in trade relationships. Although Trump has maintained his commitment to tariffs since his inauguration on Jan. 20, throughout February and March he threatened, delayed, imposed and suspended various measures – in the process removing any semblance of calm from commodity buyers and sellers alike.
Traders who do business with Asia are looking for clarity from customs authorities in Hong Kong and other major Asian ports, said Steve Wong, CEO of Fukutomi Recycling, in an interview with E-Scrap News before the 90-day pause was announced. Fukutomi is a large global trader of recycled plastics.
Wong said some companies could send material through countries with lower duties, such as Malaysia and Canada, to offset the steepest of the tariffs. But he was unsure whether the Chinese government would look the other way in such instances, or would ask for the actual origin.
Nevertheless, while global demand for post-consumer plastics has been subdued in recent months, amid lackluster consumer spending, appetite for engineered plastics such as PS and ABS has been consistent. "These are still selling very well," he said.
The lack of clarity also is forcing market players to interpret the regulations to the best of their ability. For example, commodity brokerage Cellmark believes its North American commodities are covered under the U.S.-Mexico-Canada Agreement, said James Derrico, vice president of new business. The Recycled Materials Association has stated that recycled material imports into the U.S. from Canada and Mexico qualify for the USMCA tariff exemption, provided they were collected in North America and that the importer goes through a process of certifying the material's origin.
"We think it's likely that most of these plastics are excluded, and at least Canadian and U.S. businesses excluded," Derrico said.
"But even with the reciprocal tariffs, we're not sure how that will affect the plastics market, exports out of the U.S. from what other countries are going to do," he said.
Unsurprisingly, neither buyers nor sellers are keen to pay more, Derrico said. However, after being stung by the previous round of tariffs in 2018-2019, all of Cellmark's supply contracts now include clauses to account for tariffs, he said, though the majority of the company's business is done on a spot basis.
"In situations like that, I do feel that you probably will see (paying the tariff) fall onto the broker or the shipper of record," Derrico added.
Although on-again, off-again tariffs may exclude resin shipments, market players are seeing no shortage of confusion and consternation. | Avigator Thailand/Shutterstock[/caption]
After many weeks of shifting narratives and uncertainty, participants in recycled polymer markets are working to navigate a constantly shifting tariff environment, in which buyers and sellers as well as customs officials struggle to align federal mandates with on-the-ground implementation.
Adding to the upheaval, President Donald Trump again paused most "reciprocal" tariffs the afternoon of April 9, this time for 90 days, though duties for Chinese imports rose further, to 125%.
Leading up to the latest reversal, Trump enacted steep tariffs on goods from most other countries on April 2, citing inequities in trade relationships. Although Trump has maintained his commitment to tariffs since his inauguration on Jan. 20, throughout February and March he threatened, delayed, imposed and suspended various measures – in the process removing any semblance of calm from commodity buyers and sellers alike.
Traders who do business with Asia are looking for clarity from customs authorities in Hong Kong and other major Asian ports, said Steve Wong, CEO of Fukutomi Recycling, in an interview with E-Scrap News before the 90-day pause was announced. Fukutomi is a large global trader of recycled plastics.
Wong said some companies could send material through countries with lower duties, such as Malaysia and Canada, to offset the steepest of the tariffs. But he was unsure whether the Chinese government would look the other way in such instances, or would ask for the actual origin.
Nevertheless, while global demand for post-consumer plastics has been subdued in recent months, amid lackluster consumer spending, appetite for engineered plastics such as PS and ABS has been consistent. "These are still selling very well," he said.
The lack of clarity also is forcing market players to interpret the regulations to the best of their ability. For example, commodity brokerage Cellmark believes its North American commodities are covered under the U.S.-Mexico-Canada Agreement, said James Derrico, vice president of new business. The Recycled Materials Association has stated that recycled material imports into the U.S. from Canada and Mexico qualify for the USMCA tariff exemption, provided they were collected in North America and that the importer goes through a process of certifying the material's origin.
"We think it's likely that most of these plastics are excluded, and at least Canadian and U.S. businesses excluded," Derrico said.
"But even with the reciprocal tariffs, we're not sure how that will affect the plastics market, exports out of the U.S. from what other countries are going to do," he said.
Unsurprisingly, neither buyers nor sellers are keen to pay more, Derrico said. However, after being stung by the previous round of tariffs in 2018-2019, all of Cellmark's supply contracts now include clauses to account for tariffs, he said, though the majority of the company's business is done on a spot basis.
"In situations like that, I do feel that you probably will see (paying the tariff) fall onto the broker or the shipper of record," Derrico added.
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