China said that the ban would take effect this month September, over objections of the Washington, DC-based Institute of Scrap Recycling Industries (ISRI).
The ISRI says a fifth of the trade is at risk. The announcement has made US recyclers that trade with China very nervous, reports CNN.
"In the short term we're going to see a significant drop of exports from the US into China, and there is a little bit of panic in the market," said ISRI spokeswoman Adina Adler.
"We respect what the Chinese government is trying to do ... and we want to be helpful, but they gave us practically no time for any kind of transition," said Ms Adler.
Scrap and waste is the sixth largest US export to China. Because backhaul boxes go back mostly empty rates are discounted, which has been a boon for the US recycling industry, which has an abundance of the scrap metal, paper, plastic, rubber and electronics that Chinese recyclers buy.
It can be much cheaper to ship scrap from the US to China than to send it by rail from Los Angeles to Chicago.
But Beijing says it's now banning some of the scrap categories out of concern for the environment.
The government told the WTO that it had found large amounts of dirty and hazardous material mixed with solid waste, leading to serious environmental pollution.
Against this, it is argued that the ban could exacerbate environmental problems, that imported recyclables are cleaner than their Chinese equivalents, and banning them will force many Chinese recyclers to shut down.