Born Scrappy
The go-to podcast for scrap metal exporters and traders
Born Scrappy
S3E13: Trade policy perspectives with ReMA's Adam Shaffer
In this episode, I chat to Adam Schaffer, AVP of International Trade and Global Affairs at the Recycled Materials Association (ReMA).
He has over 15 years of experience in trade policy, government relations, and international affairs, with a focus on the metal and recycling industries, including as Director of Trade and Economic Policy at the American Iron and Steel Institute.
He has a Master of Public Policy from George Washington University and a BA in International Studies.
Who better to walk us through the potential impacts of the new US administration's policies on the recycling industry?!
In today's episode, we talk about:
👉 International environmental treaties
👉 Supply chain resilience
👉 Export restrictions
👉 Retaliatory tariffs
👉 And much more!
Listen to the full episode. Wherever you stream your podcasts.
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25 years in the metal recycling game and still learning and growing...
I learnt from the best and worked my way up from yard labourer to Executive Director of Trading and Operations for the largest metal recycler in sub-Saharan Africa. Responsible for 4,500 employees, 85 sites, and the overall profitability of a multi-billion dollar operation.
I brought my breadth and depth of knowledge to bear and co-founded the fastest growing, most-loved, and most awarded metal recycling company in New Zealand. No small feat in a country where people are outnumbered 4:1 by sheep (spoiler alert: sheep don’t produce much metal waste).
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Hi, I'm Stu Kagan and welcome to Born Scrappy, the podcast for scrap metal exporters and traders. Join me in conversation with some of the most experienced traders and operators that have helped shape this incredible industry. In today's second episode on the effect the new US administration will have on the recycling industry, we move from domestic changes to the expected global effect with Adam Schaffer. Adam is the AVP of international trade and global affairs. at RIMA. Adam has been at RIMA for just under two years, and prior to joining RIMA, he was the Director of Trade and Economic Policy at the American Steel and Iron Institute. In today's episode, we talk about expecting something similar, supply chain resilience, tariffs, and so much more. So let's jump into it with Adam. But first, intro. Hi, Adam, welcome to Born Scrappy. Thanks for joining us, mate. How you doing? Yeah. Yeah. Awesome. Thank you. Um, Adam, you know, a lot of us, um, know of you know what you're doing at Rima, um, and I've seen some of the stuff you're up to, but can you just give us some background on, you know, what your role is at Rima, how you got involved in this industry and, you know, what you do on a day to day basis? Sir, so I cover international trade policy, but also global affairs for Rima. So I kind of, I deal with anything that is international, anything that's global, any of our strategic international relationships and partnerships. I kind of work on, but I also do a lot of our, uh, our federal issues, our federal policy domestically, as it relates to international policy, as it relates to international trade. I'm a big trade guy. I'm a big steel guy. I worked for more than a decade at the American Iron and Steel Institute, uh, prior to joining RIMA about a year and a half ago. I was there working on their trade policies, uh, so I've been kind of involved in, in trade policy for over 15 years now at this point. Mostly for steel, steel adjacent issues, recycling. So now getting more into the broader commodities, uh, that really represents, but, uh, you know, I've been a metals guy. I've been a steel guy for quite a while. Uh, and so yeah, looking forward to this conversation. Yeah, that's awesome. And I'll say the same thing I said to Kristen earlier, which is, um, from everybody in the industry, we want to thank you because, uh, we don't often get to, um, thank you for what you're doing behind the scenes, but we know that you do play a big part in advocating for our industry. Um, so, so firstly, thank you for, you know, for everything Rima does and what you do specifically there as well. I'm going to jump straight into, I guess, the question on everybody's mind, which is, um, The imposing tariffs. So we've obviously, we're lucky enough, have a first Trump administration that we can kind of maybe guide us a little bit about what's going to happen with this administration. What are your thoughts on the imposing tariffs and what sort of impact is it's going to have on our industry? Sir, yeah, so you're right. We are lucky. In some regards to have had 4 years of President Trump already so we can see a lot of the same people a lot of the same. Acronyms a lot of the same action, a lot of the same issues. Uh, you know, those are likely to come back in some way, shape or form over the next 4 years. Uh, there were a lot of tariffs on very specific products last time. Uh, we saw steel aluminum tariffs. We saw some solar tariffs. Uh, we saw other products where recycled materials are are a major input of, um, so I would expect to see something similar, um, but also a lot. Broader, I think, I think what we've seen throughout the campaign, uh, and throughout the past few weeks, uh, once President Trump was reelected. A couple of weeks ago, um, I, I think we're looking at something. Economy wide nationwide, uh. You know, trade wide, um, the proposals have been. Somewhere between a 10%, 10 and 20%. A tariff on imports from every country on every product. Higher for, for those from, from China. Um, I just want to give just a little bit of historical context a little bit if that's okay. Um, so the, the, the Constitution gives Congress. Ultimately, it gives Congress the power to collect taxes to levy tariffs, but Congress has actually chosen to delegate a lot of that authority to the executive branch over the years. Um, there had been. Trade legislation every few years for the 1st, like, 100, 20, 130 years of the U. S. there was a major way for the U. S. government to fund the services and operations was through tariff policy. Um, so we haven't seen that, though, in a while, uh, since really the 1930s. like, 100 years. We really haven't seen such wide scale tariffs being proposed by the government. Um, so we're, we're, we're kind of in a little bit of a retro approach here. He's President Trump has really talked. A lot about how tariffs, uh, really helped build the manufacturing base that our country was built on. Um, and so, you know, a lot of what people talk about is. The authority that has been granted. So there's all sorts of trade laws that were passed over the last 30 years that granted the president the authority to investigate certain trade violations, national security reasons, anti dumping, subsidization, all these sort of very nuanced tools for how the president Can impose tariffs, but these significant tariff increases that President Trump is proposing and, you know, within the 1st, 100 days, I think it's going to look a lot different than what we saw during the 1st term. Now, there's also a lot of, there may be a lot of economists. I think that this is going to be very inflationary. Um, I think the President has used in the past, though, he's used tariff authority as a way to negotiate. He's used it as a bargaining chip. So what he's proposing versus what it actually will look like. Those are 2 different things. I also think though, uh, you know, he does call himself the tariff man and he's still very close with several of his Former trade advisors, Bob Lightizer, who is the U. S. trade representative under, under Trump 1, as of today, which I don't even know the date. What's today? November 18th. He's not announced any of his economic team yet. Uh, so we'll have to kind of see how that all plays out, but how it kind of broadly impacts our industry. Um, you know, we are generally a net exporter of recycled commodities to the global marketplace. Uh, you know, it varies based on the commodity, but the direct impact of imposing import tariffs. On recycled materials is not as significant as the potential for indirect impacts, which would mostly come in the form of retaliation. By foreign governments, so, um, we saw that. A little bit back in 2018, 2019, when the steel and aluminum tariffs have been imposed, uh, countries, the EU, China, several other countries had imposed retaliatory measures against very specific products. Um, so if. Blanket tariffs are imposed, there is a high likelihood that countries would choose to instead, instead of just. Brennan Barrett, they may choose to retaliate against U. S. exports of various products. Now. You know, I think maybe we're a little bit lucky in that recycled materials aren't necessarily finished manufactured goods. Um, so we're kind of a little bit on the lower priority of of what foreign governments may choose to retaliate against. Um, I just a quick example, because I was just watching the news earlier during the 1st Trump term. The European Union imposed tariffs, retaliatory measures against. Harley Davidson's from Wisconsin because the Speaker of the House was from Wisconsin, and Bourbon Imports from Kentucky because the Senate Majority Leader, Mitch McConnell, was from Kentucky. So, so the initial tariff, the initial retaliatory measures were very targeted. I think if we're looking at 10 to 20 percent tariffs on all imported goods and up to 60 or 70 on Chinese goods, I think that's kind of a whole different ballgame. So it's quite, it's quite important. What you said earlier, we're a net export out of the U S right. So the U S is a net exporter. So the tariffs aren't necessarily going to have the, the effect that would on other products. However, if you follow the EU and 10 years ago, I was in South Africa where they put in, um, export restrictions, um, for all, Recycled metal. Now there's a lot of talk at the moment about, you know, some call it fortressing and keeping the recycled materials and these commodities, um, in the, in the regions that it's, um, that it kind of arises from, what are your thoughts on new export restrictions that could come into play, like we've seen in some parts of the rest of the world? So, yeah, I. It's certainly a concern, and it's certainly a concern we've been following here at REMA, uh, we've long advocated for free trade, fair trade policies across the board, not just with our own government, but also we encourage all other, uh, you know, global recyclers to do the same with their own governments. Um, I mean, I think that the, the export controls from the first Trump administration were primarily focused on limiting exports of high tech, sensitive military technologies, those types of things. Of equipment, uh, particularly to China, they were more concerned with whether or not companies could compete with with the U. S. manufacturing based on on some of these and some of these products, it's not necessarily a huge topic in the, in the campaign, you'd be surprised that no one wants to talk about whether or not, uh, recycled steel or recycled aluminum or recycled copper, uh, export controls are a big topic, but, um, you know, as we are talking about decarbonization and we are talking about an energy transition. And Um, you know, those materials are certainly really important and really integral and so, um, certain domestic consuming industries may be brushing up their talking points on something like this and to go into the administration. We haven't heard significant chatter, um, from the campaign or from some of the allies on the Hill, but we are working closely with the Commerce Department and with the career staff there to, to make sure, you know, we, we serve on various industry advisory councils and committees. Uh, we have a very close relationship with them on that front. I think that there may be some potential with China. We're seeing some major issues, some major. Backsliding, I guess, as some members of Congress are laying the groundwork for potentially revoking what's called permanent normal trading relations with with China, which could have significant effects on on U. S. exports. There, um, but I think the biggest concern we have is to worry about whether or not there's going to be. Uh, the potential retaliation against U. S. export of materials, you know, the tariff threats are. Certainly something that may many, uh, domestic consuming industries may view as an opportunity to seek export protection for sure. But, you know, we, we are working with our partners here. We're working with our partners at BIR, at, uh, at all of our other associations just to make sure that policymakers and lawmakers are aware of how distortive those, uh, how to sort of export controls and export protectionist policies are so. Okay, so what you're saying is, you know, that shouldn't necessarily, um, be causing too much anxiety for anybody right now. I think we're not as far gone as, as you find, um, some of the EU or what's happening in the EU. Um, correct. Yeah. Yeah. I don't, I don't think we have to worry about, uh, worry about some creative policy solutions like what the EU has done with their waste shipment regulations. That's, that's where. We're definitely not there and we're definitely, you know, and we'll talk about, I think we'll probably talk about this a little bit more about, you know, the overlap between environmentalism and trade policy, climate and trade policy, um, and, and how the EU is a little bit ahead of us on that. So. So, so I guess the main focus then is like you say, the retaliation from the other countries when these tariffs are imposed, um, what effect that could have on us, but talking about climate now. Um, I think Trump has said previously that he would remove the US from the Paris climate accords, if that's right. Yeah. And I think those meetings are coming up in this month. What do you think? Is that something that we can expect to see? And what effect will that have on our industry, the basal convention, et cetera? Um, you know, obviously, um, with climate, we play a big part in that holistic environment, I guess. So what impact do you think we could have there? Yeah, so, right now, the Paris Climate Accord, the, uh, it's very complicated, but the, the underlying UN Convention, so, the United Nations Framework Convention on Climate Change, so that's kind of the, the organization that runs the climate talks. They're the original ones that were signed about 30 some years ago, and the Paris Climate Accords were, were signed. 10 years ago, that is happening right now. Actually, this week, I believe in Azerbaijan, but, um, the impression from the, from the 1st Trump administration, for instance, was, uh, we expect very similar posturing in, in, in a 2nd Trump term. Um, you know, both in terms of Paris, but also in terms of broader international environmental treaties. Uh, so, you know, Paris had committed individual governments to aim to reduce their carbon emissions. Other greenhouse gas emission levels, um, as soon as the as soon as President Trump got into office, uh, he initiated the withdrawal process. It took a couple of years. As these things are are slow moving, it's the U. N. it's, uh, you know, they, they try to be as thoughtful as they can. Sometimes it can be a little bit. Um, it can, it can pose some challenges, but ultimately we, I think it was. Either the day after the election or the day before the 2020 election, um, was when we officially left the Paris Climate Accords, but then President Biden moved us back in, uh, in 2021. Um, so there's, you know, there's 2 ways that incoming President Trump can handle this. He could do what he did in 2017 and he could, he can remove the U. S. from, from Paris Climate Accords. Um, he could also pull the U. S. out of the underlying treaty, that UNFCCC. Um, and that. Would be tougher for a future president to rejoin. So if President Trump pulls us out of Paris without pulling us out of the underlying treaty, then the next president after President Trump could put us back into the, uh, into the climate accords. But if he pulled us out of the underlying Senate approved treaty, then they would have to go back and get Congress to reinitiate to rejoin this, you know, this is all kind of. Setting up for what we anticipate at the Basel Convention. So the Basel Convention kind of controls and handles all of the trade and recycled materials. Recycle products. They call it waste. We don't like that term. That's not what we would ever consider our products. But, um, you know, it's the, this is the primary international environmental treaty that governs how recycled products are traded. Um, so how President Trump decides he wants to handle the Paris Climate Accords is likely a similar approach to how he would handle other international treaties, other international environmental treaties. Thank you. So the U. S. is not part of Basel. We never signed, or actually we signed, but we never ratified the convention back in the 90s. Um, there has been talk over the past couple of years of the U. S. ratifying and joining the convention. Um, the U. S. is one of the only countries that is not currently in Basel Convention, so inevitably, even though we're not a party to it, since every other country is a party to it, we really have to kind of play by their rules, at least to some extent. Well, we don't have any say in those rules. So there had been some talk over the last 2 or 3 years about the U. S. Ratifying it, but so what ultimately would need to happen is Congress would need to pass implementing legislation. And so the chances of a new president Trump. And his congressional allies in the, in the House and Senate. Putting forth and in an international. International environmental treaty is. I think almost non existent. I mean, I don't I don't ever want to say there's a 0 percent chance or a less than 0 percent chance. But I think that it's in the low single digits, I think. Um. So, and then just if you, there's another thing that's happening really quickly is, is there's plastic street negotiations. Similar vein to what's happening these are all, you know, treaties. These are all international. Negotiations discussions and so. How the president would handle Paris probably also is how he would handle plastic street negotiations. So the very unlikely that that whatever ultimately comes out of these negotiations that the U. S. would be, uh, you know, a willing and engaged partner on. So, Adam, you spoke earlier, you know, about the retaliation effect that could happen when it comes to our industry and with this, with the election results in mind, what sort of impact do you expect Yeah. It to have with the U. S. Relationships when it comes to supply chain. Um, can you speak more to than how it could really affect our industry or positive on? Yeah, that's a, that's a good question. I mean, there's, there's just, there's been so many discussions and talking points related to supply chains, especially since the pandemic, the past few years, you know, we experienced significant disruption than shortfalls in supply chains. And so Um, you know, governments, like minded governments, allied governments have all been trying to, to figure out the best way to shore up some of these supply chains. Um, and, you know, critical minerals, critical materials, we, we talk a lot about this, FBIR for instance, uh, and then, you know, decarbonization, there's just so many, it's all the buzzwords really. Like, um, they all kind of, all, all circle together and they all, you know, what they mean and how they interact is, is, you know, It really, we are very important to it, to everything that happens in terms of the manufacturing supply chain and decarbonization, but how governments interact on tariff policy and retaliation and whether they're willing to work with each other. That's going to directly impact supply chain resiliency and whether or not, um, you know, our, our members and our processors and our recyclers are able to kind of engage and participate in that. Because if the governments aren't really cooperating on certain high level trade policies, and if they're imposing tariff, tit for tat tariffs on X, Y, Z products, and, you know, their trade people are constantly focused on, on those Trade disruptions and whether or not some of these products are able to go tariff free or what is it 30 percent tariff. What are the negotiations on this? They're not talking about supply chain resiliency. They're not talking about some of these important critical issues to decarbonization and. And to the energy transition and so there's only so much bandwidth that they can be working on. Um, and so a lot of it, as I said, it comes down to kind of. Whether or not the tariffs are going to directly be placed on recycled products, it's going to be kind of. All of these excess issues that kind of will ultimately have a potential adverse impact on trade or on whether or not, you know, whether countries are able to continue to trade on on these products. So. And this won't only affect the U S right. I mean, obviously we talking about tit for tat. So, um, I've got a lot of international listeners as well, um, who may be the first half of this, um, that might've get a bit bored where it's more about the local effect, but now we talking global, um, how. How do you recommend people stay informed in our industry? I mean, obviously people are part of the associations, et cetera. There's, there's so much up in the air right now, and there will be like this for the next few months, if not years. Um, how can people stay up to date with what's going on? If, you know, you should, you should, uh, you let me know. No, I think there's just, there's, there's so much coming at you and there it's, it's kind of tough to figure out the, you know, how to break through some of the noise. Um, I do think that. Uh, you know, use the associations as a resource, not just your national association or your local or state, you know, the international associations, you know, there's all the, there's all of the media that. Are focusing on these issues, but, um, you know, We're, we're, we're, we're going to wait and see approach right now. We still have a couple of months until, until the president is inaugurated. Um, but during the 4 years, I will, I will say during the 4 years when I was working, uh, in trade policy in steel trade policy from 2017 to 2021 during the 1st Trump term. It was the busiest I've ever been in my entire life. Um, and I had people asking me how to get tariff exemptions for random products that I had never heard of, but no one had ever heard of steel or trade really before President Trump was elected. So, you know, I think there is a, there's, it's a unique opportunity to get before policymakers to get before lawmakers, you know, engage with your local, with your local, uh, with your congressman, if you're in the U. S. And your senators. Um, you know, at Remo, we, we're having a congressional fly in here in a few months. Um, get to know your local members of Congress. Because these, the stories of, of when you look at broad scale in economic data, for instance, you don't see the 2 or 3 workers that may have been laid off because of something like this. That just kind of gets aggregated, but your local member of Congress will appreciate hearing those stories and hearing how it's affecting their, their local economy. And maybe if you're international, um, you know, how Your government interacts with the U. S. government is going to be very critical for the next few years. Um, I would say the playbook from the first Trump administration is probably worth, worth looking at. Um, you know, talk to your trade people, talk, talk to your government experts. It's going to be an interesting four years, but there's going to be a lot of opportunities, I think too, so. Yeah, I totally second that. Um, Adam, I know you've got a lot going on, um, and there's a lot going on in general. So thank you for making the time to be on Bourne Scrap. We really appreciated it. Absolutely. Thanks, man. Cheers.
