Waste Not, Want Not: Tariffs as Environmental Protection

In the global waste trade, importers buy foreign-origin waste and scrap. After recycling waste products into raw materials destined for new goods, the leftovers are just trash—imported negative externalities that can overwhelm low-capacity developing states. Yet there is power in piles of foreign garbage, especially as modern waste management systems are designed around trade. When a waste product’s imports concentrate in fewer states, those states gain market power to raise tariffs while still accommodating domestic demand. To support the theory, I introduce a list of 179 internationally traded waste products (HS 6-digit), as well as novel data on product-level tariffs and the international distribution of waste imports (1995–2020). I show the theory in action following China’s shocking 2017 ban on imports of 26 waste products, where states on the receiving end of diverted imports have exercised their newfound power to use tariffs in service of environmental protection.