The circular economy encompasses many dimensions, and the importance of deliberately adjusting which dimension to prioritise according to circumstances has been pointed out from various quarters. The “Growth-Oriented Resource Autonomy Strategy” formulated by the Ministry of Economy, Trade and Industry (METI) in March 2023 identified “resource constraints and risks,” “environmental constraints and risks,” and “growth opportunities” as the key concerns driving the establishment of a growth-oriented, resource-autonomous economy—and the circular economy has a positive bearing on each of these points. More recently, the argument that establishing regional circular models can also contribute to improved well-being and local revitalisation has been gaining traction.
The economy is by nature intimately connected to our daily lives. It is therefore natural to think that viewing the circular economy through the broad lens of “a systemic transformation that makes the economy circular” would improve all of the various dimensions described above.
People are at the heart of realising the circular economy. As a result, like climate action, it is susceptible to influence from “politics”—one of the driving forces that moves society at any given moment.
At the same time, the Planetary Boundaries framework, which objectively assesses the impact of human activity on the global environment, identifies the environmental limits that must not be crossed for humanity to survive safely. Seven of the nine boundaries have now been exceeded and are at dangerous levels (PLANETARY HEALTH CHECK 2025). Objectively speaking, the health of the planet is deteriorating.
Ideally, therefore, whoever holds political power, the circular economy would be pursued in a manner neutral to that power. In reality, however, because “politics is a living thing,” it may be possible to sustain momentum toward the transition by flexibly adjusting the emphasis placed on the various elements of the circular economy described above.
As is widely known, global conditions are changing at a dizzying pace. The prevailing view is that the world is moving toward a “my country first” stance. Over the past year or two, this tide of change has been interpreted as a “retreat of sustainability.” In Europe, moves are under way to simplify regulations in pursuit of a balance between industrial competitiveness and sustainability.
How can the drive toward a circular economy transition be made sustainable in such circumstances? The country that offers the most instructive reference for answering this question is the United States.
Does the US Need the Circular Economy? The American Situation
Many voices point out that US high-tariff policies are raising the barriers to resource procurement and driving up prices, thereby increasing the need for the circular economy.
In May 2025, Ford Motor temporarily halted production of its Explorer SUV due to a shortage of rare earths—an illustration of how China’s tightening of rare-earth export controls is affecting economic security. (Most recently, the US government’s fact sheet released on November 1, 2025 stated that China had “effectively reversed” the export-control tightening on rare earths and critical minerals it had applied in April 2022 and October 2025, though China’s own position reportedly differs.) The circular economy’s role is being looked to less as a response to environmental constraints and more as a contributor to economic security.
For example, David Linich, Sustainability Principal at PwC, noted in a Forbes interview that current US policy could accelerate circular business in the country. He pointed out that the raw materials contained in electronic waste are becoming increasingly expensive and gradually harder to obtain, and that rising raw-material prices could spur investment in recycling facilities and drive innovation. (Could Tariffs Actually Accelerate The Move To A Circular Economy?)
Leah Garden of Trellis has also argued that, for instance, Canada accounted for $47 billion of the critical minerals the United States imported in 2023, and that trade friction with countries like Canada has created a need to secure economic stability through a domestic circular economy.
If the recognition that “materials that can be sourced—including from recycling—should be sourced within the United States” accelerates, it would amount to a reshoring of industry and could be expected to revitalise new sectors. The argument is that circulating materials—especially scarce ones—within the US would also benefit the American economy. It should be noted, however, that this dimension would almost certainly have come into focus naturally regardless of Trump administration policy, just as similar concerns have been growing in Japan—for example, over the outflow of rare metals through exports of used electric vehicles. Nevertheless, it is fair to say that US tariff policy has sharpened the focus on this point.
A second dimension is the push by US companies to optimise their operations. According to Reuters, Harvard Professor Cavallo has analysed a tendency for US companies—retailers and others—rather than foreign manufacturers to absorb tariff costs. This is therefore creating pressure on certain product categories to optimise distribution networks and inventory management. Walmart, for example, is stepping up diversification of its sourcing countries and optimising logistics and inventory management through AI and big data.
For consumers, the circular economy can also serve as a countermeasure against rising prices. According to Professor Cavallo’s research (Tracking the Short-Run Price Impact of U.S. Tariffs), prices of imported goods in the United States rose 4% after tariff policies took effect in March 2025, compared with a 2% rise in domestic product prices. Price increases had already begun globally before US tariff policy, but if such conditions become the norm, consumers will be compelled to seek stronger defensive measures. While choosing cheaper goods is one option, circular-economy approaches that represent shorter loops—such as extending product lifespans, repair, and reuse—may also be selected. If that tendency accelerates in high-impact sectors such as electronics and fashion, it would, as a result, contribute to the circular economy.
The Circular Economy Under Japan’s New Cabinet
Turning to Japan: could the formation of the new Sanae Takaichi Cabinet change the direction of circular economy policy?
The Green Transformation (GX) policy being advanced by the government centres on energy, and resource circulation is positioned within that GX framework. GX has been designated as one of 17 strategic fields under the headings of “crisis-management investment” and “growth investment” by the Japan Growth Strategy Headquarters established by the Takaichi Cabinet, under the category of resource and energy security and GX. At a press conference, Prime Minister Takaichi stated: “The key to the growth strategy is ‘crisis-management investment’—getting ahead of risks and social challenges to fundamentally strengthen supply capacity.”
It is conceivable that greater emphasis will be placed on nuclear and geothermal energy, that there will be changes in specific areas such as regulations on large-scale solar development, and that GX will evolve toward strengthening domestic industrial competitiveness—but the importance of GX itself will not change. The circular economy was positioned as a national strategy in 2024, and a ministerial council on the subject has been convened. The circular economy policies cultivated across the relevant ministries and agencies can be expected to continue to a certain degree, but the elements that receive focus may shift. For example, Hirotaka Ishihara, the newly appointed Minister of the Environment under the Takaichi Cabinet, stated at his inaugural press conference that he wishes to advance the circular economy as something that also contributes to the economic security that Prime Minister Takaichi prioritises. (Source) The logic of “recycling and reuse that contributes to economic security” is clear and therefore easier to gain broad understanding for. This is a situation similar to that seen in the United States, and to the EU, which plans to enact a Circular Economy Act next year that substantially incorporates this logic. In that sense, the fact that the amended Act on the Promotion of Effective Utilisation of Resources (a law promoting the efficient use of resources across their lifecycle), whose revision was enacted in May 2025, newly categorises CE-commerce businesses such as sharing services is well aligned with the current situation. In addition to recycling and reuse, sharing, rental, refurbishment, repair, and remaking all extract maximum value from resources and goods—forming a foundation for value creation centred on physical products.
Room for the Circular Economy Concept to Develop
As an aside: economic security, loss reduction, domestic innovation, regional revitalisation, and protection against rising prices for consumers—focus from these directions is directly linked to national survival strategies or is closely tied to people’s daily lives, and therefore contains a great deal of visceral, instinctive appeal. That makes it easier for people to see these issues as their own. This can also be seen as an opportunity to deepen understanding of the still somewhat vague concept of the circular economy and to broaden its reach.
There is a paper demonstrating that the circular economy has 221 definitions (Conceptualizing the Circular Economy (Revisited): An Analysis of 221 Definitions). The drawbacks of having so many definitions are numerous, but one positive aspect is that precisely because the circular economy admits of such diverse interpretations, the concept itself holds considerable room to develop. Unlike a clearly defined concept such as carbon neutrality, the circular economy’s concept evolves as different interpretations intersect with one another. The current moment can be seen as one in which high-resolution, easily understood elements—such as economic security, food security, and cost reduction—are being added to the concept.
【Reference Articles】
- Seven of nine planetary boundaries now breached
- Could Tariffs Actually Accelerate The Move To A Circular Economy?
- Trump’s tariffs deepen America’s need for domestic circular economy
- Focus: US Companies Bear the Brunt of Trump Tariff Costs as Price Increases Creep In
- Transcript of Minister Ishihara’s Inaugural Press Conference (Wednesday, October 22, 2025, 3:15–4:29 p.m., Conference Room No. 1, Ministry of the Environment)
【Reference Papers】
- Tracking the Short-Run Price Impact of U.S. Tariffs (Alberto Cavallo, Paola Llamas, Franco Vazquez, 2025)
- Conceptualizing the Circular Economy (Revisited): An Analysis of 221 Definitions (Julian Kirchherr, Nan-Hua Nadja Yang, Frederik Schulze-Spüntrup, Maarten J. Heerink, Kris Hartley)
