![]() That means that the United States and the EU have a valuable opportunity to reach an agreement that would enable strong climate action at home and encourage low-carbon economic development around the world. Meanwhile, the United States has proposed the Global Arrangement on Sustainable Steel and Aluminum (GASSA), an initiative in which a club of member countries could impose emission-related tariffs on countries that are not part of the consortium.Įither proposal, if it gains traction among other countries, could set the international standard for the use of tariffs to facilitate climate action. The amount of the tariff is calculated based on the carbon price per ton of emissions paid by companies in the EU’s member countries. ![]() In December, after protracted and painful negotiations, the EU finalized its carbon border adjustment mechanism (CBAM), which will impose a tariff on imports of certain products such as steel and aluminum. These measures are designed to impose additional costs on the import of products based on their level of carbon emissions. As they do so, the discord between Washington and Brussels over climate and trade policies will worsen if the two allies cannot align their starkly different and arguably incompatible proposals for carbon border measures to preserve competitiveness. The United States and the European Union have ambitious plans to decarbonize their economies while rebuilding their manufacturing sectors. Green industrial policy is in vogue on both sides of the Atlantic.
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