Trump risks new tariffs hurting US workers and businesses
President Trump’s decision to withdraw from the Paris Agreement goes against the climate and economic interests of the United States, argues the author of this opinion piece, and could lead to tariff measures imposed by leading trading partners that are legal under international trade law.
President Trump’s 1 June action exiting the Paris Climate Agreement, announced with a speech heavy with imaginary facts, probably will achieve the opposite of what he promised. His reckless blunder may drive other countries to enact new tariffs on US exports, which will harm, not help, American workers and businesses needlessly. The rest of the world was holding back, given US leadership in achieving Paris, but facing Trump, the European Parliament has already debated this possible response.
Leading US trade partners – including Mexico, the European Union, Japan, South Korea, Chile, and Australia – already impose a price on their own carbon pollution, and Canada, China, and others have decided to do so. China will operate the largest carbon pricing system in the world at the end of this year. Other nations are raising their own companies’ costs and putting them at a disadvantage in international trade, because they know climate change and air pollution will be even worse for them.
Their carbon emissions per person (including in China) are already less than half of America’s, and dramatically less in India. We Americans are responsible for the largest share of historical world greenhouse gas accumulations. And we are still the second largest emitter of new carbon pollution every year. Far from “laughing at us,” as Trump suggested, our partner countries have been leading and tolerating us.
But now that Trump has reversed US policy and moved aggressively to take advantage of them commercially and pollute their world even more, these nations could level the playing field by slapping new tariffs on goods from countries like ours that do not price our own pollution.
Those tariffs can be legal under global trade law. Article XX of the General Agreement on Tariffs and Trade authorises exceptions for measures related to conservation of an exhaustible natural resource such as clean air, and measures necessary to protect human, animal, or plant life or health, as long as the new tariff does not impose arbitrary or unreasonable discrimination between countries, and is not a disguised restriction on international trade. The World Trade Organization Appellate Body has approved such exceptions, including for US environmental laws that impede trade. Acting in the name of the Paris Agreement, a universally-signed environmental agreement, will further bolster the case that these measures qualify for Article XX.
Last year the US exported $2.2 trillion worth of goods and services. So now in the line of fire are US workers and companies that manufacture cars, aircraft, industrial machines, semiconductors, telecommunications gear, medical equipment, chemicals, pharmaceuticals, and plastics. Equally vulnerable are farmers and ranchers who sell soybeans, corn, meat, and poultry.
The US exports coal, crude oil, natural gas, and refined petroleum products. It has a trade surplus in refined products. Could this be why Exxon, US coal companies, and so many other companies urged Trump not to do this?
So Trump’s action was foolhardy even if one cared only about short-term US economic self-interest. This is before considering the greater harm he is causing Americans and the world by intensifying the coastal flooding, extreme weather, and illness we already suffer because of climate change, and by sacrificing international cooperation we need for a whole range of foreign policy goals.
To top it all, President Trump’s withdrawal was completely unnecessary. The UN agreement imposes no concrete policy steps on any country. What it requires is that each country make some pledge – of its own choice – to take action to address climate change beginning in 2020, and to implement its pledge. Trump could have changed President Obama’s pledge without withdrawing.
Trump’s claim that Paris exposed the US to legal liability is also threadbare. The Agreement does not authorise material sanctions against any country for failing to comply.
Perhaps Trump hoped that by triggering nationalistic pride, he might fool some Americans into accepting a reversal that will harm them. But most Americans disapprove of his move. Even among Trump voters, more than 6 in 10 favour taxing or regulating the pollution that causes global warming, or both, and only 1 in 5 support neither, according to a Yale survey.
Americans can have greater prosperity and protection from climate change at the same time. But to get them, we certainly need more competent, responsible leaders.
John S. Odell is Professor Emeritus of International Relations at the University of Southern California (USC) and Senior Fellow at the Centre for International Governance Innovation.