US and EU weigh climate-based tariffs on Chinese steel and aluminium
- Such a move work mark a novel approach, using duties – normally employed in trade disputes – to further a climate agenda
- The idea is in an initial phase, insiders say, and it is unclear what legal authority the Biden administration would use to implement new tariffs
The US and European Union are weighing new tariffs on Chinese steel and aluminium as part of a bid to fight carbon emissions and global overcapacity, according to people familiar with the matter.
The move would mark a novel approach, as the US and EU would seek to use tariffs – usually employed in trade disputes – to further their climate agenda. US aluminium and steel producers climbed in extended trading.
The idea, generated within US President Joe Biden’s administration, is still in an initial phase and has not been formally proposed, according to the people, who asked not to be identified as the discussions are not public.
An agreement with the EU, including specifics on how to identify thresholds for applying tariffs, is not likely until late next year at the earliest, one of the people said, adding that even that timeline was optimistic.
The new framework, which builds on a related US-EU agreement last year, is mainly aimed at China, the world’s biggest carbon emitter and producer of steel and aluminium, as well as other large polluting nations, according to the people.