Reman could ‘help solve US trade deficit’
- December 06, 2018
Remanufacturing could help solve the US’s trade deficit, according to Clyde Eiríkur Hull, professor of management at Rochester Institute of Technology. Hull writes on The Conversation website: “President Donald Trump is fighting the wrong fight in his ongoing trade war with the rest of the world. That’s because it’s premised on the old-school notion of the linear economy in which someone in another country, such as China, digs up raw materials and sends them to a factory, where they get turned into the finished product and shipped to the US.”
Money therefore leaves the US economy and flows to the countries where the product was made, thus “creating the trade deficit Trump despises”. But adopting circular economy principles would help solve this issue, Hull believes – and suggests Trump could employ a ‘carrot and a stick’approach. “The carrot involves setting a standard of design to ensure all products are made with future use in mind, as well as using his influence to encourage Americans to buy goods remanufactured in the US,” Hull writes. The ‘stick’ would be tax policy, with the US government taxing products that cannot be converted into raw materials after use, as well as those made with less than a certain percentage of reused components.This figure would be set to gradually increase, and tax revenue could be used to support research into remanufacturing, Hull concludes.