In Washington – ACMA Insider – November 16, 2023

Ashley Howe Insider

Border Taxes Based on Carbon Gain Traction to Match EU 

Two pieces of legislation have been introduced in recent weeks that look to match efforts by the European Union and United Kingdom to place taxes on imports that produce more greenhouse gas emissions. ACMA is asking members to send key tariff lines for inputs as we analyze the impact the bill will have on our industry The bill is unlikely to pass this Congress, but the idea of a coordinated carbon tax approach with the EU is gaining momentum in Washington.  

Senator Bill Cassidy (R-LA) and Lindsay Graham (R-SC) introduced the Foreign Pollution Fee Act of 2023 earlier this month.  Based on an initial review of the bill, it would potentially raise the price for imported glass fiber, natural and artificial graphite, and resins.  The Cassidy/Graham bill is applied to specific Harmonized Tariff Schedule classifications, while a Democratic alternative is based on specific industries using the North American Industrial Classification System (NAICS). That bill, the Clean Competition Bill, was introduced over the summer by Senator Sheldon Whitehouse (D-RI), Senator Brian Schatz (D-HI), and Martin Heinrich (D-NM).  

At a Senate hearing this week, Senator Whitehouse suggested U.S. manufacturers would face an initial headwind followed by a massive beneficial tailwind as these taxes are put in place.  This is because U.S. manufacturers would initially face the growing pains of a relatively modest carbon-based adjustment upon importation into the EU and UK markets, but would then quickly find themselves out-competing imports from countries with more greenhouse gas emissions, such as China.  Efforts currently underway to decarbonize the U.S. supply chain would further reduce the initial headwind and magnify the benefits.  

Contact Dan Neumann to share key import categories.