China's Retaliatory Tariffs Hit Small Recycling Business NPR's Michel Martin speaks to Jeff Padnos, co-owner of Padnos Recycling, about how the tariffs on China are affecting his business.
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China's Retaliatory Tariffs Hit Small Recycling Business

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China's Retaliatory Tariffs Hit Small Recycling Business

China's Retaliatory Tariffs Hit Small Recycling Business

China's Retaliatory Tariffs Hit Small Recycling Business

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NPR's Michel Martin speaks to Jeff Padnos, co-owner of Padnos Recycling, about how the tariffs on China are affecting his business.

MICHEL MARTIN, HOST:

We're turning now to Jeff Padnos. His grandfather started the family business, Padnos Recycling, in 1905. He's with us on the line now from Holland, Mich., where the company is based.

Mr. Padnos, thanks so much for joining us once again.

JEFF PADNOS: Thank you for this opportunity, Michel.

MARTIN: Could you just tell us a little bit about your company? What do you do? How does the company work?

PADNOS: We help companies and people make the best use of all resources. We are in the scrap processing and recycling business. When companies make something, they always have a byproduct. Anytime anybody makes anything physical, there's always a byproduct, and we help them to recognize the value, whether it's the trimming from making a file cabinet door or a part of a car or - and then, after a product has been used, we also help get the value out of an obsolete product such as an automobile. We'll shred that up and sort out all the different metals in it and help put that back to use.

MARTIN: So just...

PADNOS: We also do that with paper and plastics.

MARTIN: Just help me see it. So you gather recycling materials, and then you sort it, and then you sell it, right? Is that it?

PADNOS: Right.

MARTIN: Is that about right?

PADNOS: Yes.

MARTIN: OK. Have the tariffs affected your business so far?

PADNOS: It's been a pretty dramatic effect. Different materials have been affected differently, but the biggest effect was felt very quickly - was China's retaliation. I certainly hope that any idea that there would be no retaliation has been put to rest. They put a 25 percent tax on aluminum scrap, and it was imposed immediately, so even products that our customers had bought that were on the water and could not be diverted faced that tax when they got there. But, in the last week or so, it's gotten even more dramatic because the customers over there who have seen the effect on one product are afraid to buy anything else from us. So China was 60 to 70 percent of our metal exports, and the market's virtually gone.

MARTIN: Well, the - obviously, the intention of these tariffs is to create more business and more jobs in the United States. So I guess the question would be, can you replace those overseas customers with customers in the United States? Can you maintain your business and perhaps even grow your business internally?

PADNOS: We will have to look for other markets. It's happened very, very quickly, but we will find a way to respond. The irony is that the - one of the intentions was to improve our balance of trade, and the industries like ours that are being affected by the retaliation are exactly the industries that had been already contributing to a favorable balance. We were helping to offset the trade deficit. The United States exports a lot more of our product than we import, and so we're helping. And this will - it will certainly hurt against that objective. As far as finding other markets, it's very hard to replace a market like China. That will take some doing.

MARTIN: That's Jeff Padnos. He's co-owner of Padnos Recycling in Holland, Mich.

Mr. Padnos, thanks so much for talking with us once again. Let's keep in touch.

PADNOS: OK. Thank you very much, Michel. I appreciate this opportunity. Thank you.

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