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Tariff Surge: What’s Changing Globally In recent weeks, the U.S. has escalated its tariff regime, introducing a 10% baseline tariff for most trading partners while maintaining 25% duties on steel, aluminum, and other critical raw materials for manufacturing. While a 90-day pause has been offered to some nations, the trade war with China has intensified, with tariffs on Chinese goods surging from 20% to an alarming 145%. In retaliation, China has imposed tariffs on U.S. imports as well. ( USA Today ). Meanwhile, the European Union has authorized countermeasures covering €21 billion worth of U.S. goods. However, it was agreed to delay the implementation of these measures until 14 July, mirroring the U.S.'s temporary pause ( DW ). Additionally, countries like Vietnam and Indonesia are actively negotiating with Washington to avoid further escalation, with Vietnam offering tariff relief on U.S. products in exchange for reciprocal treatment ( USA Today ). Beyond Tariffs The tariff escalation is not the only issue at hand. In addition to imposing tariffs, the Trump administration has taken several actions that significantly undermine sustainability efforts, both domestically and globally. The Trump administration has rolled back over 100 environmental regulations. Among the most significant changes were the weakening of carbon dioxide emission limits for power plants and vehicles, the removal of protections for wetlands, and the relaxation of mercury emission restrictions. Public lands were opened for oil and gas leasing, alongside reductions in wildlife protections and energy efficiency standards. ( New York Times ). The U.S. also formally withdrew from the Paris Agreement, which marked a significant retreat from global climate leadership. This move was accompanied by the halting of federal climate funding, including billions of dollars earmarked for energy and environmental projects ( American Progress ). The suspension of federal grants for clean energy initiatives also disrupted projects nationwide. This also created economic confusion at state and local levels, impeding the progress of sustainability projects ( New York Times ). Additionally, the attempt to eliminate stricter EPA vehicle emissions standards. If successful, this could significantly reduce the pressure on global manufacturers to develop environmentally friendly vehicles and invest in cleaner technologies, slowing down the transition to sustainable energy solutions ( Earth Justice ). Government Budgets Under Pressure The introduction of tariffs presents a significant concern for governments, especially when it comes to the potential regression of environmental regulations. As economic pressures mount, countries may be tempted to relax environmental standards or delay the implementation of climate-friendly reforms. This could be exacerbated by the economic toll on a country’s GDP, leading to restrictions on public spending budgets. It is projected that total tariff measures could increase from $76 billion a year to nearly $697 billion annually ( PwC ). The Rising Cost of Manufacturing This surge in tariffs has a broader impact beyond government budgets. For consumers and producers alike, these tariffs are expected to increase costs. In fact, 73% of Americans expect prices to surge under Trump's tariffs ( Reuters ). This is not a myth! Industries that rely on imported raw materials, such as plastic manufacturing, are feeling the impact of these tariffs. For example, costs for plastic production could rise by 12-20% depending on supply chain adjustments ( American Chemistry Council ). Additionally, essential components like raw materials, packaging, and processing equipment often sourced from countries like China - are also becoming more expensive ( Sterling Plastics ). Turning the Tide: How EPR Can Help Governments and Businesses Thrive Despite the challenges posed by tariffs, there is a compelling opportunity for both governments and companies to leverage Extended Producer Responsibility (EPR) systems to navigate this disruption. EPR As A Government Solution For governments, waste management is often one of the largest budget items, accounting for 20-50% of operational spending ( IMF ). EPR offers an attractive solution by shifting the responsibility of waste management from solely public authorities to a shared accountability model between producers and authorities. This is especially critical in developing economies, where economic pressures and reduced foreign aid can limit public sector funding. Through EPR systems, governments can ease the burden of waste management, freeing up significant resources for other areas of public spending. By involving the private sector in waste management, EPR creates a support mechanism that can help alleviate fiscal constraints. For governments, this means one of their largest expenditures is now shared with the private sector, which can foster more sustainable systems and reduce the strain on public budgets. The New Business Case Under Tariffs For companies, tariffs create a tough decision: relocating production to avoid tariffs or accepting the increased costs. The latter could erode profit margins or force them to pass on costs to consumers, damaging their competitive advantage. However, shifting manufacturing locations is no simple task - it requires years of planning and substantial investment. To stay competitive and emerge from economic volatility, companies need to explore new strategies, including circular economy models and localized EPR systems. EPR systems can offer businesses a stable supply of high-quality recyclates, which is particularly important as global supply chains become increasingly unpredictable. The European Union, one of the most successful regions in implementing EPR, has seen its local recycling capacity grow to 13.2 million tonnes of plastic in 2023 ( Sustainable Plastics ). Participating in an EPR system allows businesses to access locally produced recyclates for manufacturing, helping to stabilize production even in times of supply chain disruption. Moreover, as manufacturing locations shift and tariffs increase, companies are incentivized to optimize their products for sustainability. One effective strategy is eco-design - designing products with their end-of-life management in mind. This can reduce waste disposal costs and align with EPR regulations. Eco-design can be incentivized and managed under an holistic EPR solution. The Growing Demand for Sustainability Despite rising costs, there is a powerful incentive for businesses to lead the charge in clean transitions. Consumer demand for sustainable products is growing rapidly. In fact, 84% of consumers say poor environmental practices would alienate them from a brand ( The Roundup ). Furthermore, consumers are willing to pay a 9.7% sustainability premium, even amid inflationary pressures ( PwC ). Companies that prioritize sustainability are not only aligning with consumer values but also positioning themselves for long-term success. A commitment to sustainability and EPR allows companies to build loyal customer bases and secure a competitive edge. Conclusion: Turning challenges into opportunities Rather than viewing tariffs and trade tensions as a hindrance, businesses should see this period of uncertainty as an opportunity to take proactive steps. By investing in sustainable innovation, circular economic practices, and complying with regulations like EPR, businesses can stabilize their operations and future-proof themselves against future economic instability. In times of economic disruption, sustainability isn’t just an ethical choice - it’s a strategic decision that can help secure long-term success and market leadership. If your company is facing the impact of tariffs, integrating an EPR scheme into your business model is the way forward. Now is the time to act! To understand how to participate and benefit fr om EPR, contact us at solutions@gfs.earth. ---------------------------------------------------------------------------------------------------------------------------------- About GreenForest Solutions: GreenForest Solutions (GFS) is a global leader in sustainable waste management and circular economy solutions. We specialise in Extended Producer Responsibility (EPR) strategies, waste system design, and capacity building to transform waste into valuable resources. Committed to creating a cleaner, greener planet, we partner with governments, businesses, and communities to develop innovative solutions that drive ecological and economic progress worldwide. Join our newsletter to stay updated on the latest from the world of EPR and circular economy.