4 Ways Tariffs Could Impact RPET markets
Uncertainty around the rules of engagement in trade have been plaguing international markets for the last couple of months. Confusion as to which goods are subject to standard and extraordinary tariffs is expected to continue within the foreseeable future, so four ways in which tariffs will impact RPET trade are outlined below:
Tariff exemptions: RPET (recycled polyethylene terephthalate plastic) coming from Mexico and Canada is not subject to any tariffs, since it is compliant with the USMCA trade agreement. Recyclers in the US frequently use RPET in the feedstock and finished resin industries, and therefore any additional burdens on their operations would lead to financial difficulties and industrial bottlenecks.
Potential shifts in polythene and polypropylene markets: Tariffs are still applicable to recycled PE (polythene) and polypropylene imports, with rates varying by country of origin. For instance, Thai recycled PE is subject to a 46% tariff. The US also imports HDPE from Australia and the UK since both countries use the material for consumer goods such as milk jugs, and are thus easily available, unlike Mexico or Canada. Retaliatory tariffs are also expected to affect US exporters since China imports 16.8% of the US total PE exports, with Europe a close second (15%). Consequently, virgin PE and other recycled materials could flood the market, and in turn affect pricing.
The US recycled plastic market: Tariffs have affected the domestic market for recycled plastics, with recyclers stocking up on inventory and pausing international partnerships even when the domestic supply market for RPET is insufficient.
Rising equipment and manufacturing prices: Unsurprisingly, the manufacturing cost of products made with RPET are likely to increase in likely to increase
