Washington December 8 2022: U.S. officials are proposing to levy tariffs on steel and aluminum based on how much carbon the producing country’s industries emit, in a bid to fight climate change and “dirty” metals made in China and elsewhere, two people familiar with the plan said on Wednesday.
The proposal from the U.S. Trade Representative’s office to be negotiated with the European Union would create a global “club” of market-oriented countries seeking to reduce carbon emissions. The plan would set “emissions intensity” standards for the production of specific steel and aluminum and products, according to a document describing the plan seen by Reuters.
Countries that are members of the “global arrangement” with emissions exceeding these standards would pay higher tariffs when exporting metals to countries with lower emissions, according to the document. Countries with steel and aluminum plant emissions at or below those of the importing country would pay no carbon-based tariffs.
“There would be an advantage of being in the club, as it would provide a lower level of carbon tariffs, while countries outside the club would pay higher tariffs,” one of the sources said, adding that the proposal aimed to incentivize investments to reduce emissions.
“This is all very conceptual and there’s a lot of work ahead on this. The details are going to be very important.”
Countries outside the low-emissions club would be subject to a higher rate of tariffs when exporting steel and aluminum to member countries.
The proposal, which is now being shared with industry and EU officials, has grown out of U.S.-EU discussions on “green” steel production over the past year after Washington halted tariffs on EU-produced steel and aluminum in exchange for a quota system.
