Tariffs Targeting Carbon Emissions Would Be a Costly Blow to Free Trade

When President Donald Trump issued executive orders in 2018 that called for new tariffs on imported steel and aluminum, the official justification for the policy was, somehow, national security.

Of course, no one really believed that. Jim Mattis, Trump’s defense secretary at the time the tariffs were imposed, said the Pentagon didn’t need tariffs on imported metal to protect the country. “I scratch my head a little bit about the rationality of a presidential action” based on national security that even the Pentagon disputes, wrote a federal judge who reviewed the tariffs as part of a lawsuit brought by steel importers. Even Trump himself made no secret of the fact that the tariffs were purely good, old-fashioned economic protectionism cosplaying as a national security concern. “If you don’t have steel, you don’t have a country,” he memorably—and nonsensically, since there are many countries that don’t make their own supplies of steel—tweeted in 2018.

The Trump administration had to do the whole “national security” song and dance because it provided access to a convenient loophole to impose tariffs without the consent of Congress—thanks to Section 232 of the Trade Expansion Act of 1962, which delegates presidential authority over tariffs for issues relating to national security.

At the time, some observers pointed out that Trump’s tactic of declaring economic issues to be national security issues vastly expanded the powers granted to the president under Section 232. Some even suggested that it opened the door for a future president to declare climate change a national security issue and assume massive new powers over trade.

Sure enough, that’s what it looks like the Biden administration is now set to do.

Last month, the White House reportedly sent a proposal to the European Union that would see the U.S. and Europe (and presumably other countries like Canada and the United Kingdom) form a consortium that would agree to impose high tariffs on steel and aluminum produced outside the consortium. The goal, according to The New York Times, would be two-fold: “to bolster domestic industries in a way that also mitigated climate change.”

The environmental angle is that countries with higher environmental standards for the production of steel and aluminum would make it more expensive for their domestic businesses to import metal made in places like China, where the environmental standards are less strict. The economic angle, of course, is that steel- and aluminum-consuming industries in America and Europe would end up having to pay artificially inflated prices—while steel and aluminum manufacturers would benefit