Chinese aluminium is subject to new tariffs by the US and EU to combat climate change

In an effort to reduce carbon emissions and global overcapacity, both United States and the European Union (EU) are considering imposing fresh tariffs on Chinese aluminium and steel. The move will be a novel approach as both nations will use tariffs to fight carbon emissions and global overcapacity.

According to the sources, the proposaloriginated within President Joe Biden's administration andll inandinfancy and wasn't publicly offered. An agreement with the EU, including specifics on determining thresholds for implementing tariffs, is unlikely until next year.

As per the reports, the new framework is primarily directed at China, the world's largest carbon emitter and manufacturer of aluminium and steel, as well as other major polluting nations, and builds on a previous US-EU pact from last year.

However, the US and EU's discussions on how to jointly solve the climate catastrophe are encouraging for a relationship that is once again being strained by trade issues, such as Biden's hallmark climate bill, which European nations claim discriminates against their businesses.

What legal power the Biden administration will employ to enact such tariffs is unknown. Sources stated that the issue is still being discussed internally, with the EU, and with industry representatives. Not only has this, but also reports suggested that the White House had discussions with lawmakers regarding potential expanded powers.