As a candidate, President Joe Biden promised U.S. steelworkers he would levy tariffs on steel imported from countries that fail to meet climate obligations. But like most political promises, that’s proving easier said than done.
Following in the footsteps of the EU, Biden’s has proposed imposing tariffs on steel and aluminum imports based on how much greenhouse gases are emitted in production.
Biden’s new program — which is still in the “planning” stage — could alter the global trade for industrial materials, giving priority to products made from recycled metals using solar power, which would give the U.S. and Germany a clear advantage over those made at coal-fired blast furnaces in China and Ukraine.
And all of that could triggering trade disputes, as Europe is pushing is own newly approved plan to impose tariffs on imported materials based on the price of carbon paid by domestic producers, which will protect European manufacturers against cheap imports.
But the U.S., which doesn’t have a comparable domestic carbon pricing mechanism, and prefers to base tariffs on the carbon footprint of the traded products.
Meanwhile, the clock is ticking, and if the U.S. and Europe can’t find a common definition of carbon footprints by the end of 2023, European retaliatory could lead to tariffs against billions of dollars of U.S. products, including whiskey.
By Yuka Hayashi/WSJ