These proposals are still hypothetical—they need to be approved by EU member states. But the point of the tariff is to keep the new generation of low-carbon European goods from being undercut by cheaper imports from countries that aren’t working to reduce emissions. A draft leaked last month suggested the policy could target, among other things, steel imports. While China is by far the world’s top steel exporter, the United States is still in the top five.
Despite talking a big game on the campaign trail, Biden hasn’t moved forward with ambitious climate policy so far. Most of the meager climate provisions originally included in the White House’s signature infrastructure package have been tossed out or weakened during negotiations with congressional Republicans.
There’s plenty to debate and criticize about Europe’s latest slate of proposals—among other things, it might make fuel or housing more expensive for those with less to spend, which could lead to backlash. (Critics have pointed to the 2018 “yellow vest” protests in France, which were responding in part to gas tax hikes.)
But the bottom line from the American perspective is this: In addition to being shown up by Europe on emissions reductions, the U.S. may take a trade hit and see its exports suffer.
As Politico’s Zack Colman explained, this tariff policy “will leave Biden with a grim set of options. The White House could take a page from Trump’s trade playbook and impose its own retaliatory tariffs, or it could seek to challenge the EU’s move by resurrecting the World Trade Organization’s hobbled dispute resolution body, an option sharply opposed by U.S. climate policy advocates.”
What a mess. Almost all of it could have been avoided with ambitious American climate policy, paired with international coordination.
—Heather Souvaine Horn, deputy editor
