Scrap recycler spells out tariff effects for NPR

Jeff Padnos, the CEO of Holland, Michigan-based scrap recycling firm Padnos, has conducted an interview with National Public Radio (NPR) in which he points out several detrimental effects of the growing global trade dispute.

In the interview with NPR’s Scott Simon, posted online Saturday, June 23, Padnos points to China’s 25 percent tariff on imported aluminum scrap and its sudden decision to halt inspections in the United States for one month as having caused turmoil for his family business. “We still have some material that we shipped that has not been able to clear through and get to the customer, so that's created a lot of uncertainty,” he told Simon.

Padnos indicates that the company is seeking new outlets for material, but adds, “It’s hard to make up [for] a market like China.”

The company’s scrap supply side also could be affected by the trade disputes, Padnos says, if customers that fabricate with steel or aluminum find it is more cost-effective to import finished goods rather than make them with steel or aluminum that carries a 10 or 25 percent import duty.

The scrap recycler, at the interview’s conclusion, urges diplomats in the United States and China to consider a metaphor offered by pundit George Will that labels tariffs as comparable with “putting up a blockade on your own country. Historically, when you put a blockade on someone, it was considered an act of war. In a way, it’s like an act of war on ourselves.”

In China’s case, he notes the nation needs the aluminum scrap since it helps companies in that nation produce aluminum using less energy and creating less air pollution. Thus, the tariff on scrap “works directly against [China’s] own environmental goals.”