Under legislation introduced this week in the House (H.R. 4534) and Senate (S. 2378), beginning Jan. 1, 2024, the U.S. would impose tariffs on some imported goods to account for the cost incurred by U.S. businesses to comply with U.S. laws and regulations limiting greenhouse gas emissions. The measure, which follows a similar proposal recently put forward by the European Union, could be rolled into an appropriations bill currently being readied for congressional approval.
The tariffs would initially cover goods that are both carbon-intensive and exposed to trade competition, including aluminum, iron, steel, cement, natural gas, petroleum, and coal. However, imports from least-developed countries and countries that do not impose their own border carbon adjustment on goods produced or manufactured in the U.S. would be exempt. The list of subject goods would expand as the U.S. improves processes for determining the carbon intensity of different types of goods.
Revenue from the tariffs would support the development and commercialization of emissions reductions technologies and provide resources to workers and businesses affected by the transition to a low-carbon economy. They would also fund a new grant program to provide states with resources to equitably assist vulnerable communities with climate resilience efforts.
Sen. Chris Coons, D-Del., said the bill would ensure that the U.S. is “at the table for reframing trade around climate.” Rep. Scott Peters, D-Calif., added that it would “facilitate a race to the top among U.S. companies to produce the next generation of clean energy and technology.”
For more information on this legislation, please contact Nicole Bivens Collinson at (202) 730-4956 or via email.
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