U.S. Plastics Industry Posted $1.1B Trade Surplus in 2023

April 26, 2024

Perc Pineda, PhD
Chief Economist, PLASTICS

The trade surplus of the U.S. plastics industry speaks volumes of the positives of plastics use globally. Reducing plastics production will reduce consumer welfare.  

At the recently concluded IMF (International Monetary Fund) and World Bank Spring meetings, the discussion centered on “Guarantee: Boosting Billions to Trillions,” highlighting the crucial role of exports in driving employment and economic growth. Preliminary data indicates that the U.S. plastics industry generated a $1.1 billion trade surplus last year. While exports declined by 7.0% to $74.2 billion, imports decreased more significantly by 16.3% to $73.0 billion. This surplus marks a reversal from the $7.4 billion deficit in 2022, which continued a deficit that began in 2020.

Supporting sustainable economic growth

The plastics industry works to promote good-paying work and economic growth, thereby contributing to the reduction of poverty worldwide. The U.S. plastics industry employs over a million workers, while globally, it provides employment for millions more, while also promoting good health and well-being. Calls to eradicate plastics are ill-advised.

Given ongoing geopolitical conflicts for example, critics should rethink the role of plastics in food security. The World Bank reports that food insecurity is expected to worsen through at least 2027, undermining progress toward poverty and hunger eradication by 2030. Unfortunately, by the end of 2020, over 80% of actively food-insecure individuals resided in fragile or conflict-affected areas. The number is higher today considering the increase in areas experiencing conflict. Plastics packaging, with its ability to extend shelf life, lightweight nature, and durability, can complement efforts to reduce food insecurity effectively. 

Plastics products keep us safe and protected and enhance our way of life. The critical role of plastics became apparent during the 2020 pandemic, where plastic materials were utilized to protect healthcare workers. Medical equipment and supplies predominantly incorporate plastics due to their cost-effectiveness without compromising healthcare quality. Moreover, single-use medical plastics are indispensable in preventing the spread of disease and bacteria. Many of the innovations in medical and health care were possible because of plastics.

Proposed UN treaty might constrain consumer choice 

The above examples indeed align with the first three Sustainable Development Goals of the United Nations, illustrating how the plastics industry contributes to the economic well-being of consumers. However, it is imperative to recognize that the underlying principle of the United Nations Environment Program’s global plastics pollution treaty suggests reducing plastic production, which may impose constraints on consumer choice.

A reduction in plastic production could have unintended consequences, potentially putting healthcare workers at risk and depriving low-income consumers in developing countries of access to retail products packaged in plastics. Having experienced life in a developing country firsthand, I understand why low-income consumers often rely on single-use-sized products. For many, a significant portion of their income is allocated to food consumption and shelter—a reality that may not be fully grasped by individuals living in more advanced circumstances in G7 countries who advocate for reducing plastic production. Obviously, the problem here is not plastics packaging production.

A solution looking for a problem?

A global plastics treaty that undermines the extensive efforts of countries on market access principles, both on tariff and non-tariff barriers under the World Trade Organization agreements, risks limiting market expansion and potentially introducing new non-tariff barriers. This could ultimately reduce consumer welfare. The alternatives to plastics in packaging are not only costlier but also more resource-intensive and, most importantly, pose greater harm to the environment. The United Nations Global Plastics Treaty could lead to this outcome, resembling a solution in search of a new problem. 

The full analysis 2023 plastic trade and the first half of 2024 will be available in Fall of 2024, in the annual PLASTICS’ Global Trends Report.