Sens. John Kerry, D-Mass., and Lindsey Graham, R-S.C., have been trying to pass a Senate energy and climate bill that, like the House version of climate legislation, would include a tariff on products imported from countries that had less strict emissions standards, Business Week reported, noting that the tariffs have the support of utilities such as American Electric Power, and several manufacturing sectors. The chance that tariffs could inspire a backlash has been expressed by those opposed to the measure, including Gary C. Hufbauer, a trade expert at the Peter G. Peterson Institute for International Economics, who was quoted as saying: "The tariff is playing with fire. It's a recipe for a lot of retaliation."
China has already expressed objections, but many industry lobbyists and political leaders have not taken their comments seriously. Sen. Sherrod Brown, D-Ohio, was quoted as saying: "It's bluster." Timothy J. Richards, manager for international energy policy at General Electric, worried that a tariff could hit companies that have met U.S. standards, but are located in high-polluting countries. Another consideration was what positive effect a tariff would have.
Wrote Business Week: "Ultimately, some economists argue, a carbon emissions tariff may not even provide the leverage its proponents believe it will. Supporters of the tariff cite the need to protect U.S. industry from heavily polluting rivals in India and China. Those two countries are major polluters, but mostly in the production of goods and services consumed locally. Together they accounted for only 13% of 2007 U.S. imports of aluminum, cement, chemicals, paper, and steel, according to U.S. government figures."
