Leibowitz: Taxing Imports—Are the Rules Irrelevant?

The US and the European Union have been engaging in talks designed to reduce global “overcapacity” in steelmaking. These talks stemmed from the agreement between the US and EU to change US Section 232 import measures from tariffs to tariff rate quotas (TRQs).

The US has announced a plan (details are scarce) to impose higher tariffs on steel from countries that generate higher levels of carbon emissions, or are “non-market” producers (i.e., China). The EU has a somewhat more complex plan, which includes carbon trading in steel, in which high polluters would be excluded from the EU market unless they “buy” the right to trade from other producers that pollute less.