Price on trade: Evaluating potential approaches to emissions policy and border measures

The only way to achieve net zero goals worldwide is to significantly reduce the greenhouse gas emissions of the global steel industry. And emissions standards can play a key role in encouraging (or discouraging) steel decarbonization. In that spirit, earlier this year, the Biden administration established a climate and trade task force, aimed at a promoting “a global trading system that slashes pollution, creates a fair and level playing field, protects against carbon dumping, {and} supports good manufacturing jobs and economic opportunity.”

These are ambitious and laudable goals. Across sectors, the United States has a significant carbon advantage over many of its economic competitors. This is certainly true in the steel industry, where American manufacturers are among the lowest emitting in the world. In other words, when it comes to steel, climate-focused trade policy can go hand-in-hand with US competitiveness.