First and most obviously, a carbon tariff would impose significant new costs on American consumers, companies, and workers. For example, recent U.S. tariffs on more than $350 billion worth of imports have been found to cost Americans over $50 billion per year. The PROVE IT Act targets over $600 billion worth of imports, suggesting the cost of carbon tariffs could be even higher than the Trump‐​Biden tariffs. Import taxes hurt Americans by increasing prices, particularly those in the lowest income brackets, and U.S. companies’ competitiveness by raising their production costs or insulating protected firms from market competition. For example, President Trump’s imposition of tariffs on imported steel inflicted significant damage on steel‐​consuming U.S. companies (like nail manufacturers)—the new taxes cost their workers directly through layoffs and the companies became less competitive as they were forced to either share the costs with their customers by raising prices, reduce production, or decrease investment. As a result, the tariffs did little to “level the playing field,” instead the President surrendered home‐​field advantage and gave the edge to foreign competition, who faced no such taxes.

Second, the history of U.S. tariff policy raises serious concerns that a carbon tariff would not be administered in a sound and impartial manner. Instead, these tariffs would simply be a vehicle for rote protectionism.

[This is much less about climate change than it is about protectionism and revenue enhancement. There may be good reasons on rare occasions to impose tariffs, but the only truly rational context for tariffs are either protecting domestic production or punishing a trading partner. That’s it. And both of those are usually not laudable goals in most circumstances, and not at all good for consumers even when justified. — Ed]