USTR Opens Door to Enforcement Measures Over EU Carbon Border Charges

The Office of the U.S. Trade Representative is accepting comments through Nov. 9 on the current and potential impact of the European Union’s carbon border adjustment mechanism and what measures the U.S. may need to take in response.

CBAM requires EU importers of covered products (currently iron and steel, cement, aluminum, fertilizers, electricity, and hydrogen) into the EU to pay the difference between the carbon price paid in the country of production and the price of carbon allowances under the EU’s Emissions Trading System. The EU began full implementation of CBAM on Jan. 1, 2026, but is considering proposals to expand coverage as of Jan. 1, 2028, to hundreds of additional products.

USTR is therefore seeking comments on the following issues.

– CBAM’s current impact on the costs, regulatory burden, and access to the EU market for U.S. producers, workers, direct and indirect exports, and overall trade with the EU

– the potential impact on those four categories of the EU’s three proposals to expand CBAM coverage

– whether CBAM and the EU’s three proposals disadvantage, advantage, or have other impacts or potential impacts on U.S. companies as compared to EU companies or third-country companies

– whether and what enforcement action may be appropriate to remedy any negative effects of CBAM