Biden wanted a climate alliance with Europe. He’s getting a carbon trade war
While John Kerry is in Moscow to agree some kind of US-Russian ‘climate cooperation,’ the EU is planning to announce carbon trade barriers against the rest of the world, including the US.
It was inevitable that the relentless radicalisation of climate hysteria and protectionist carbon border taxes would ultimately lead to a global trade war and the self-destruction of the Western alliance.
Today, we are a step closer today to this geopolitical upheaval that is likely to unravel the international political order for good.
Biden wanted a climate alliance with Europe. He’s getting a fight.
A brewing carbon trade war with Europe threatens to scuttle President Joe Biden’s hopes for cross-Atlantic harmony in the fight against climate change.
The European Union’s leadership is set to unveil a proposal on Wednesday to tax imports from countries — including the U.S. — that lack aggressive carbon-reducing policies. That move has sparked fears that protectionism will derail hopes for a new era of international climate change cooperation ushered in by Biden’s presidency.
The Biden administration is wrestling with how to respond to the new tariff threats, even as it works with the EU to remove trade barriers that former President Donald Trump had slapped onto European goods like steel and aluminum.
“You could bring back the kind of trade frictions that have been characteristics of the U.S.-EU relationship with tit-for-tat solutions, and I think that’s a problem,”said John Podesta, who was President Barack Obama’s top climate adviser and is in frequent contact with Biden officials.“
The bilateral relationship between the U.S. and EU democracy is perhaps the most important relationship now to create a structure for solving these global problems, and that’s why this is sort of a test case for that. Can we get our act together now?”
Biden has made addressing climate change one of his administration’s top priorities, but the U.S. is miles behind the European Union, which has created a bloc-wide carbon trading system to wean itself off the greenhouse gas that plays the biggest role in warming the planet. As the EU tightens its regulations on carbon emissions, it’s wary of allowing foreign companies that face no climate-related costs at home to flood its market with cheaper goods.
The tariffs the EU is expected to propose on Wednesday 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.
“Are we really going to let an unelected international body dictate whether we act on climate and jobs? That would be insane,” said National Wildlife Federation CEO Collin O’Mara, who is close to the White House climate team and said he has discussed the trade topic “more in the past two weeks than in the last two years” on the Hill and with the administration.
Much of the conversation in U.S. climate policy circles centers on how to act on the vague promises Biden made during last year’s campaign to slap fees on carbon-heavy imports. The imminent EU proposal has pushed environmental groups and the Biden administration to speed up their policy discussions after dialogue with EU officials failed to slow the tariff rollout, as U.S. officials had hoped.
Both the EU and the U.S. insist any climate trade policy must remain compliant with WTO rules. Podesta said the EU had pushed for the WTO to facilitate a conversation with the U.S. over the carbon tariffs.
But the WTO is essentially mothballed since the Trump administration blocked the appointment of new members to fill its appellate body. The Biden administration hasn’t been enthusiastic about its track record, and its trade policy agenda noted the U.S. Trade Representative would address “systemic concerns” with the WTO’s appellate board that has been defunct since 2019, chiefly over disagreements with how it handled tariffs.
Green groups worry that the WTO has also tended to ignore environmental issues when deciding disputes.
“The WTO track record on climate and environmental protections hardly inspires confidence that this body should be issuing pronouncements on countries’ efforts to tackle the climate crisis,” said Ben Beachy, director of the Sierra Club’s living economy program.
The EU plan is expected to impose fees on imports of aluminum, steel, electricity, cement and some fertilizers that come from countries that lack their own domestic measures to fight climate change, according to a leaked draft obtained by POLITICO.
As well as protecting the EU’s own industries, the move is designed to prod the bloc’s trading partners to adopt carbon pricing systems or comparable measures, although it could be difficult to judge whether systems would be weaker or stronger than the EU’s own carbon rules.
Climate policy advocates worry that tariffs are a blunt and aggressive instrument that are likely to trigger a backlash.