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White House Hesitant to Support First U.S. Carbon Border Tax

Chris Gaetano
Published Date:
Aug 23, 2021

The $3.5 trillion reconciliation spending plan currently under consideration by Congress has the country's first ever carbon border tax, which would be levied on foreign goods, but the White House has expressed hesitance in supporting it due to concern that it would lead to an increase in the cost of living, Reuters reported.

While the specifics of the tax would need to be set by the White House, overall, it would be imposed on foreign imports based on the product's carbon impact. Companies that want to sell concrete, steel, aluminum or other commodities into the United States would be required to pay a tariff if their country imposes fewer carbon-cutting regulations than American companies do.

However, the White House raised concerns that imposing this carbon tax would raise the price of goods, as other countries could impose retaliatory tariffs if affected. This, in turn, would affect the prices of raw materials, which would then be passed on to consumers. Such price increases could serve to undermine President Biden's campaign pledge not to raise taxes on those making under $400,000 a year. 

Consequently, the White House so far plans to withhold its support for the measure, as it coordinates with allies, such as the European Union, which plans to implement a carbon tax of its own. 

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