Five days after the release of the EU CBAM (Carbon Border Adjustment Mechanism) proposal and three days after the launch of China's carbon market, the United States took further action on their long-planned carbon border tax scheme. On July 19th, Sen. Chris Coons (D-Del.) and Rep. Scott Peters from the Democratic Party announced carbon border tax would be added to the $3.5 trillion reconciliation bill proposed by the Democrats. The carbon border tax, estimated to raise $5 billion to $15 billion for the US government every year, would be imposed on countries that do not meet the US standards on carbon emission.
According to New York Times, the carbon border tax will be initiated in 2024 and affect approximately 12% of the imports in the United States. Six products will be covered, including petroleum, coal, aluminum, steel, iron, and cement. The tariff rate will be equivalent to that of the domestic greenhouse gas producers, regulated by federal and state laws.