A Conversation on Navigating the Future of Trade with Dr. Robert Koopman, Former Chief Economist of the World Trade Organization

Preliminary data shows that the U.S. plastics industry’s trade surplus grew from $958 million in 2023 to $1.3 billion in 2024—a 37.9% increase. This growth was driven primarily by a steady $23.7 billion surplus in plastics materials and resin over the past two years, along with reduced trade deficits in plastic products and molds for plastics manufacturing. While the U.S. trade deficit in plastics machinery and equipment rose by 9.6% in 2024, the surplus in plastics materials and resin was substantial enough to offset deficits in other industry sectors.

While U.S. plastics trade fluctuates with changing global economic conditions, the imposition of tariffs on imports from Europe and China—along with the renegotiation of NAFTA into the USMCA—has not significantly reduced U.S. trade in plastics.

Today, however, U.S. trade policy is shifting, anchored in President Trump’s America First Trade Policy and Reciprocal Trade and Tariff policies. These shifts are affecting both the domestic and global economy, generating uncertainty across various sectors as the trade policy evolves. The manufacturing sector, a key customer of the plastics industry, is directly impacted. With U.S. plastics trade accounting for 20.0% of its domestic shipments, changes in trade policy have significant implications for the industry’s supply chain.

As the world’s largest consumer of imported goods, changes in U.S. trade policy particularly the threat of higher tariffs reverberates across borders worldwide.

To explore the future of trade from a broader perspective, I had the privilege of speaking with                 Dr. Robert Koopman, a world-renowned expert on international trade. As part of this year’s annual trade blog for the Plastics Industry Association, our conversation provided valuable insights into global trade dynamics. Dr. Koopman is the Hurst Senior Professorial Lecturer at the American University’s School of International Service and Editor-in-Chief of the Global Value Chain Development Report. He previously served as Chief Economist and Director of Economic Research and Statistics at the World Trade Organization (WTO) from 2014 to 2022. Additionally, he held key executive roles at the U.S. International Trade Commission, serving as Chief Economist (1999–2011) and Chief Operating Officer (2011–2014).

This is an excerpt of what was a very insightful conversation.

Pineda: Dr. Koopman, thank you for joining me to discuss an important issue—international trade. Our industry enjoys a trade surplus except in 2020 – 2022 due to the COVID-19 pandemic that interrupted global trade. I often say that, for the plastics industry, the world is our market, and our industry thrives under free and fair trade.

As the former Chief Economist of the WTO, how do you view the current trajectory of international trade? U.S. trade policy continues to evolve, and there seems to be a growing preference for bilateral agreements over multilateralism. Would you say that observation is accurate?

Koopman:

Thanks for having me. Yes, that observation is accurate and reflects an important structural shift in the way global trade is governed. Historically, the United States was a chief architect and champion of multilateralism, believing that a predictable, rules-based global system benefited not just the world, but also U.S. exporters, consumers, and geopolitical interests. However, in recent years, U.S. policy has leaned away from multilateral commitments—like those enforced through the WTO—in favor of bilateral or regional deals and even unilateral measures. This trend, driven by both political and economic considerations, suggests a growing mistrust of large, rule-based systems perceived as slow-moving or ineffective, particularly in dealing with large, non-market economies like China.

Pineda: Beyond tariffs, what should be the focus of U.S. trade policy in addressing its persistent trade deficit and reliance on imports covering many goods and commodities? I imagine there are both short- and long-term considerations, but what should be central to an effective trade strategy?

Koopman: 

The U.S. trade deficit is a function of macroeconomic fundamentals—most importantly, the gap between domestic savings and investment. Given the U.S.’s role as the global reserve currency issuer, there is persistent demand for U.S. assets, which puts upward pressure on the dollar and makes imports cheaper relative to exports. Tariffs, in this context, are not a solution; bilateral ones simply shift trade patterns and tariffs on all trading partners reduce overall trade without changing the underlying deficit and with high likelihood increasing domestic prices.

Instead, U.S. trade policy should be oriented around increasing competitiveness, productivity, and innovation. This involves investment in infrastructure, workforce development, and education; support for R&D and technology transfer; and expansion of export capacity through trade facilitation. It also means reducing domestic policy barriers that stifle firm growth or deter investment.

Pineda: The U.S. plastics industry relies on imported components, many of which are no longer manufactured domestically. At the same time, domestically produced components face strong competition from imports. What, in your view, would be the optimal trade policy to ensure the industry maximizes the benefits of free trade?

Koopman:

The optimal trade policy for the U.S. plastics industry should start by recognizing the industry’s position as deeply embedded in global value chains and highly reliant on both upstream and downstream linkages. Many key inputs—especially chemical feedstocks, machinery parts, and specialized additives—are sourced from global suppliers due to comparative advantage, scale economies, and, in some cases, the absence of domestic production. Likewise, U.S. plastics manufacturers compete globally on price, quality, and speed, and rely on export opportunities to achieve scale and sustain innovation.

A sound trade policy must therefore ensure continued access to competitively priced inputs while supporting the ability of U.S. producers to move up the value chain. Tariff protection may offer short-term relief for some segments of the industry, but over time it risks raising input costs, eroding competitiveness, and inviting retaliation. The better approach would combine openness with strategic support measures. This includes strong enforcement of trade remedy laws where unfair practices exist, but also government investment in R&D, technical training, recycling innovation, and modernization of ports and logistics systems.

Pineda:  Building on what you said, how can U.S. trade policy strike the right balance between protecting domestic industries and fostering global competitiveness in sectors like plastics?

Koopman:

To ensure long-term competitiveness, U.S. trade policy should also focus on maintaining and expanding market access through free trade agreements and digital trade rules that simplify customs, reduce barriers, and enable small and mid-sized firms to integrate more easily into global markets. Encouraging regional supply chain integration, particularly through the USMCA, also helps reduce risks and enhances responsiveness to demand shifts.

Pineda: When do you think the U.S. trade and tariff issues with its trading partners might be resolved? Of course, it will depend on when negotiations take place and an agreement is reached, but I am curious to hear your thoughts on whether there are economic conditions that could help ease the current trade tensions.

Koopman:

The resolution of U.S. trade and tariff tensions will ultimately depend on a combination of political will, institutional capacity, and macroeconomic conditions that create openings for compromise. In the near term, it is unlikely that the current array of tariffs and retaliatory measures will be rolled back wholesale, especially given the domestic political incentives for maintaining a tough stance on trade. I believe President Trump’s main affinity for tariffs and trade tensions relates to his belief, mistaken in my view, that they will result in large scale reshoring and stronger, more innovative economic growth in the U.S. As I stated above, that would be completely inconsistent with historical outcomes and empirical evidence. However, certain economic developments could create pressure—or opportunity—for de-escalation.

Pineda: Dr. Koopman, we have covered a lot of ground today. This has been a very insightful conversation, and I sincerely appreciate your time and invaluable insights on behalf of the more than one million workers in the U.S. plastics industry.

In an effort to provide a broader perspective on industry issues, the annual trade blog presents the views of the authors and does not necessarily reflect those of PLASTICS. The association’s annual review of the plastics industry’s trade is featured in the PLASTICS Global Trends Report. This year’s report will analyze U.S. plastics trade in 2024 and the first half of 2025, highlighting the impact of changes in U.S. trade policy and the responses of key trade partners. The annual PLASTICS flagship report is scheduled for release at the K Show in Düsseldorf, Germany, this October.

You can access my full conversation with Dr. Koopman on one of the most pressing concerns today – the future of global trade – here