The EU recently released plans to tax carbon imports coming into the union. As such, any goods coming in would be taxed as if it was produced in a member state. However, the US is not convinced when it comes to the method of carbon tariffs.
The EU aims to be carbon neutral by 2050. The international community sees this goal as quite adventurous. BRICS countries in specific had “grave concern” regarding the EU’s plans to reduce carbon emissions. Many less developed countries also would have trouble following the EU’s path.
Previously, the US stated how such a proposal would be difficult to implement in the US. As well, carbon border tariffs would be considered a last resort option for the US. If the US were to implement border tariffs, it could incentivize countries to stop trading with high carbon tax countries. This would not bode well for climate change due to trade being shifted towards countries with fewer tariffs. Therefore, high emissions goods and services will continue being traded for low prices.
The border pricing mechanisms are being heavily pursued by the EU, but it would take 2 years to implement the legislation. The fight against climate change however will require every method possible.