U.S. might impose a carbon tax on Canadian goods

 

The United States is talking with trade partners about enacting a carbon border tax, reporters in Washington say.

Both Democratic and Republican lawmakers have proposed carbon border tax schemes to ensure fair competition for U.S. producers, focusing on issues such as taxing both domestic and foreign products and harmonizing carbon accounting methods.

Senator Sheldon Whitehouse, a Democrat from Rhode Island, and House of Representatives Suzan DelBene, a Democrat from Washington State, have put forward the Clean Competition Act which compares the carbon intensity of imports with U.S. standards.

Senator Bill Cassidy, a Republican from Louisiana, has drafted a Foreign Pollution Fee to apply to imports with higher carbon intensity compared to domestic counterparts.

U.S. fertilizer producers, for example, support the proposals because they provide policy certainty for investments in decarbonization.

One of the big challenges is striking a balance between policy comprehensiveness and administrative feasibility. 

The adoption of carbon accounting rules and mutual recognition across industries and trade partners globally is also important.

Carbon-reduction measures raise concerns about costs, which is Conservative Pierre Polievre’s issue with Canada’s carbon tax, but those who favour carbon reduction measures argue