Trump Trade Policies: Good News for the Environment?

Pragmatic Environmentalists

“Visibly tense” is the way Amy Chang describes a recent closed-door session with senior supply-chain and sustainability executives. The conversations focused on rising tariffs, deglobalization, and mounting geopolitical risk.

Amy Chan, who has spent more than a decade leading environmental initiatives and investments at the World Bank and Apple, now serves as chief sustainability officer at the University of California, Berkeley’s Haas School of Business.

Ms. Chan, can you tell WSJ readers what surprised you the most about the session? 

Chan: Yes, I can. The big surprise was when the discussion quickly moved to the possibility that President Trump’s trade war might accelerate environmental progress. That was especially surprising since President Trump doesn’t seem to be a fan of green policies.

Also surprising was when Trump’s name was brought into the discussion: (1) Could Trump’s trade war be positive? (2) Could it reflect optimism over emissions, overconsumption, and waste?

Chan: Unlike my anxious peers, who are nervous about the future of sustainability, I see things differently. Here are my three reasons:

1. The reordering of global trade is forcing companies to rethink supply chains. Many supply-chain leaders are outlining an emerging strategy called “manufacturing in region for region.” This means producing goods in North America for North American consumers, in Europe for Europeans, and so on. That’s good for stability and even better for the planet.

   According to the Environmental Protection Agency, transportation accounts for roughly 15% of global greenhouse-gas emissions. Fewer transoceanic journeys mean less emissions.

2. President Trump’s recent move to end the de minimis tax exemption for low-value imports from China in the hope of curbing America’s addiction to fast fashion and disposable goods supplied by retailers like Shein and Temu.

   (Temu is an online marketplace, offering discounted consumer goods mostly shipped to consumers. Temu is operated by a Chinese e-commerce company. Concerns about Temu range from data privacy, forced labor, intellectual property, and quality of marketplace products.)

   This would result in fewer impulse buys and less landfill waste. Manufacturers may also respond by producing higher-quality, longer-lasting products. The effect won’t be limited to cheap goods. Higher prices on electronics, appliances and vehicles will encourage consumers to extend the life of what they already own. The greenest car isn’t a new electric vehicle; it’s the one you don’t replace.

3. The U.S. remains deeply dependent on China for critical minerals such as rare-earth elements. Rare earths are vital inputs for everything from smartphones and EVs to wind turbines and military systems. China accounts for more than two-thirds of global rare-earth production. The U.S. can mitigate this vulnerability by investing in domestic rare-earth recycling infrastructure.

Already existing is the technology to recover rare earths from discarded electronics. Few companies have been willing to follow Apple’s lead. Apple is more than 99% of the way toward its 2025 targets of using “100% recycled rare-earth elements in magnets and 100% recycled cobalt in Apple-designed batteries.”

Why not more? It’s too expensive. Where’s the incentive when rare earths are cheap? No need to recycle.

Serious policymakers could start by rummaging about America’s junk drawers.

Don’t mistake “rummaging” for a coordinated climate strategy, Ms. Chan continues. Unlike Joe Biden, Donald Trump doesn’t make climate change a religion. The difference is somewhere in between removing sustainability as a priority and actively opposing it.

Chris Wright, Secretary of Energy, has been consistent in his messaging: The Trump administration isn’t against clean energy or EVs. It is placing its bets on energy dominance and economic competition. If sustainability efforts don’t conflict with Mr. Trump’s key priorities, there’s room for progress. 

Environmentalists Need to Be Pragmatic 

Hoping for a different political landscape is a waste of time. What is possible is that Trump “might do more for the planet than a thousand environmental, social and governance reports.” Environmental objectives most likely aren’t going to align with this administration’s strategic interests.