Free Trade

More Tariffs Won't End Pollution or Solve Global Warming. They'll Just Make Stuff More Expensive.

Taxing Americans to punish other countries for having lax environmental rules would be a logistical and bureaucratic nightmare. Democrats are trying to do it anyway.

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The last three years have provided a pretty effective lesson about how tariffs impose immense economic costs and generally don't achieve their primary policy aims, but Democrats in Congress apparently didn't pay close enough attention.

As part of an overall $3.5 trillion federal budget framework unveiled this week, Democrats are calling for new taxes on imported goods from countries that don't adopt stricter environmental rules. Details like what would be taxed and at what rates remain scarce for now, but The New York Times explains that the so-called polluter import fee would "require companies that want to sell steel, iron, and other goods to the United States to pay a price for every ton of carbon dioxide that is emitted during their manufacturing processes. If countries can't or won't do that, the United States could impose its own price."

Officials in the European Union have already outlined plans for a similar system, called a "carbon border tax," though no country has adopted such a system.

In theory, these import taxes would put pressure on countries that do a lot of dirty manufacturing—and, specifically, China—to adopt stricter environmental rules of their own.

In practice, however, this scheme looks like it would tax Americans in order to punish foreign manufacturers for spewing too many emissions. Dan Mitchell, an economist with the Center for Freedom and Prosperity, a free market think tank, points out that the implementation of a polluter import fee would also require a massive expansion of federal bureaucracy to measure the amount of carbon produced by every imported good, determine appropriate tariff rates, and enforce payment. In both the U.S. and the E.U., he writes, it would be "a huge recipe for cronyism and favoritism."

Indeed, in reviewing the E.U. proposal for a carbon border tax last week, The Wall Street Journal reported that companies would have to submit reams of data for "carbon audits" carried out by European Commission regulators. Companies that refuse will be subjected to a blanket tariff based on the emissions of the 10 "dirtiest" European producers of the same goods. That's backdoor protectionism under the guise of environmentalism, and it would likely drive up costs for consumers while driving out many smaller producers that currently sell products into the E.U. market.

There's also a good chance it would ignite a major trade war. The Times notes that the proposal "would be difficult to carry out, and could anger trading partners and face a challenge at the World Trade Organization." Even if things don't get that bad, there's still no way to guarantee that making imports more expensive will convince the countries exporting those goods to adopt different policies.

There are libertarian arguments both for and against a national carbon tax, which would attempt to convert some of the public costs of carbon emissions into actual costs for companies that do the emitting. One of the problems with carbon taxes, however, is that hiking taxes on domestic polluters only encourages the shifting of more carbon emission–heavy manufacturing to parts of the world where those policies don't exist. In short, it risks doing damage to your own economy while not achieving any significant gains in terms of reduced emissions.

The carbon border tax or polluter import fee can therefore be understood as an attempt to solve that problem—and to universalize whatever carbon policies developed nations might impose in coming decades. But it runs up against a serious practical problem. Taxing one's own citizens is a poor way of getting other nations to change their behavior.

Former President Donald Trump's departure from the White House was supposed to put an end to this kind of magical thinking about tariffs. Trump and his trade advisers saw tariffs as the solution to just about every geopolitical issue. China is stealing American companies' intellectual property? Tariffs. Turkey is threatening to invade Syria? Threaten to "swiftly destroy" their economy with some tariffs. Immigrants are coming across the southern border from Mexico? Tariffs! The prime minister of Canada was sorta mean to you? More tariffs!

But all those tariffs and tariff threats accomplished little for Trump. The minor trade pact he reached with China after more than two years of trade-warring was never very serious and has already effectively collapsed.

Perhaps that's because tariffs—which are, once again, nothing more than taxes on your own people and domestic industries—aren't a particularly effective tool at getting other countries to change their behavior. It's like telling your annoying neighbor that you'll smash your fist into your own front door if he doesn't stop blasting his music. He might care enough to prevent you from hurting yourself, but it wasn't the threat that did it.

The plans that Senate Democrats are drawing up do have one major advantage over the tariffs Trump futilely tried to impose. If the United States and the European Union are both going to impose these tariffs, they might have a better shot of changing global trade patterns than when the U.S. was engaged in its quixotic, solo trade wars during the Trump years.

But make no mistake: The costs of these policies will still fall squarely on Americans and Europeans.

NEXT: Magical Thinking Abounds in New Budget Deal Discourse

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  1. “But make no mistake: The costs of these policies will still fall squarely on Americans and Europeans.”

    I can think of one American in particular who will be hurt by tariffs. His name is Charles Koch, and he’s the billionaire who funds Reason.com.

    #InDefenseOfBillionaires

  2. Trump loves tariffs which makes tariffs wonderful and Reason a leftist rag for being critical of something Trump holds dear.

    1. Shut the fuck up, screetch.

      1. Are tariffs grand or are they not? Trump never met a tariff he didn’t like, and that makes them good, right? Except Biden does too which makes them bad, right? So how does one figure it out? Everything must be judged on who, not what, so when they do the same thing it gets so confusing because when he does it it’s right but when he does it it’s wrong! I’m so confuuuuused!!!

        1. “Are tariffs grand or are they not? Trump never met a tariff he didn’t like, and that makes them good, right?”

          It takes a TDS-addled piece of shit to drag a strawman like that around.

        2. You’re not sarcastic, you’re hyperbolic.

    2. “Taxing Americans to punish other countries for having lax environmental rules would be a logistical and bureaucratic nightmare. Democrats are trying to do it anyway.”

      It takes a TDS-addled lefty piece of shit to read that line and immediately whine about Trump.

      1. So you mean to say now that Trump is out of office tariffs are bad once again? Because I distinctly remember four years when there wasn’t a tariff that the Republicans weren’t fapping to.

        1. Logic and principles are ad hominems. You should be talking about people, not ideas. That’s rational discourse.

        2. Please, TDS-addled piece of shit, cite *ONCE* where I ever supported tariffs.
          Stuff your TDS up your ass so your head has some company

  3. The whole purpose of being a progressive is to use the coercive power of government to force people to make sacrifices for what they see as the common good. You don’t advocate forced sacrifice because it’s in the best interests of the sacrifice. That wouldn’t be sacrifice. That would be greed. The point of forced sacrifice is to benefit other people who aren’t making the sacrifices. Being greedy is bad enough. Please don’t compound the problem by insisting that these sacrifices should benefit Americans rather than others. That would be racist.

  4. Explains a lot of the ESG push from the multinationals lately.

    Woke billionaires gotta play.

  5. Passing off increased costs of production onto the customer?!?!

  6. remember when a bunch of incredible dummies argued endlessly here in the comments that the executive branch unilaterally and arbitrarily raising taxes was actually good because their favored politician did it? lmao

  7. Former President Donald Trump’s departure from the White House was supposed to put an end to this kind of magical thinking about tariffs.

    LEAVE THE DOTARD ALONE!

    1. “Taxing Americans to punish other countries for having lax environmental rules would be a logistical and bureaucratic nightmare. Democrats are trying to do it anyway.”

      It takes a TDS-addled lefty piece of shit to read that line and immediately whine about Trump.

      1. We bring up Trump because that’s exactly what Trump did. That’s what tariffs are, a tax on Americans so we can feel all smug about not trading with foreigners.

        1. “Taxing Americans to punish other countries for having lax environmental rules would be a logistical and bureaucratic nightmare. Democrats are trying to do it anyway.”

          It takes a TDS-addled lefty piece of shit to read that line and immediately whine about Trump.
          Stuff it up your ass so your head has some company, TDS-addled piece of shit.

    2. Leave that dotard Adam Smith alone!

      Adam Smith was obviously a moron for wanting tariffs to offset local taxes on production, but it’s just mean for those of us who are so much smarter than him to say so!

  8. More Tariffs Won’t End Pollution or Solve Global Warming. They’ll Just Make Stuff More Expensive.

    That’s the whole point.

    1. You have to be retarded to think this Green New Deal shit has anything to do with pollution and global warming. It’s a way to punish people for being successful by transferring their wealth to people who aren’t successful. And it’s not simply greed and envy, it’s misanthropy. Human beings are sinful creatures who must be punished for their sins. There is to be no joy, no humor, no pleasure, no happiness in our brave new future, life is suffering and if you’re not suffering you’re not living right. Look at the Left these days – does it look like a single one of them is having any fun? Running around screeching angrily about how awful everybody and everything is? These can’t possibly be happy people, they’re the most miserable people on Earth.

      1. It’s about wealth redistribution.

  9. The Trump administration has so far imposed $80 billion worth of new taxes on Americans by levying tariffs on thousands of products, which is equivalent to one of the largest tax increases in decades (the 17th largest tax increase as a share of GDP since 1940).
    Tariffs imposed so far by the Trump administration are estimated to reduce long-run GDP by 0.23 percent, wages by 0.15 percent, and employment by 179,800 full-time equivalent jobs.
    The administration’s outstanding threats to impose additional tariffs would, if acted upon, further reduce GDP by 0.24 percent, wages by 0.17 percent, and employment by 184,200 full-time equivalent jobs.

    https://taxfoundation.org/tariffs-trump-trade-war/

    Trump – Mr. 1% GDP (worst economic record of any POTUS since the Great Depression).

    1. If one compares the three years prior to COVID the economy was doing well, but you already knew that. Blue state governors colluded to impose the great lockdown forward which stoved up the economy. But you already knew that.

      1. “If one compares the three years prior to COVID the economy was doing well”

        LOLOLOLOLOL

        Every single Drumpf year saw worse GDP growth than a typical Obama year.

        Tell him, Mr. Buttplug! Break out the stats!

        #IMissObama

      2. “If one compares the three years prior to COVID the economy was doing well, but you already knew that…”

        If turd posts *ANY* statistic at all, you can safely assume it is cherry-picked to favor the D’s.
        If turd were ever honest, the earth’s rotation would reverse; turd lies. Every post from turd is a lie.

      3. When conservatives were whing about Obama’s 2% GDP they never gave him a break for the financial collapse and Great Recession.

        Trump is MR 1%, niggas!

        1. If turd posts *ANY* statistic at all, you can safely assume it is cherry-picked to favor the D’s.
          If turd were ever honest, the earth’s rotation would reverse; turd lies. Every post from turd is a lie.

        2. What????????

          Obama — who you’ve repeatedly credited with creating the strongest economy in US history — only managed 2% GDP growth?! That’s literally impossible. That would mean his economic record is even worse than George W. Bush’s.

          OK, I get it. This must be Impostor Buttplug. No way the real Buttplug would be sloppy and stupid enough to contradict the message he’s been promoting for years.

          1. No, this is the one and only real buttplug.

            conservatives whined and claimed Obama’s GDP was only 2% by rounding it down. In reality it was much better.

            But don’t obscure the real issue here – Trump is MR 1% GDP! (rounded UP at that)

            1. If turd posts *ANY* statistic at all, you can safely assume it is cherry-picked to favor the D’s.
              If turd were ever honest, the earth’s rotation would reverse; turd lies. Every post from turd is a lie.

            2. “No, this is the one and only real buttplug.”

              OK. Prove it by telling me Jimmy Carter’s 4-year average GDP growth, George H. W. Bush’s 4-year average GDP growth, George W. Bush’s 8-year average GDP growth, and Obama’s 8-year average GDP growth.

              (The Obama number needs to be by far the highest or I’ll know you’re the impostor.)

              1. too lazy

                1. If turd posts *ANY* statistic at all, you can safely assume it is cherry-picked to favor the D’s.
                  If turd were ever honest, the earth’s rotation would reverse; turd lies. Every post from turd is a lie.

    2. That’s a bunch of crap. He must be some democrat hack.

  10. Americans, Europeans and anyone else who desires a significant reduction in global carbon emissions should be demanding the US government, the EU and the UN to pressure China to reduce its carbon emissions, which have doubled in the past 20 years (while US emissions have declined about 35%, and EU emissions have also declined).

    As US emissions continue declining, the huge increases in Chinese emissions will dwarf and more than negate all the progress in the US.

    But since China has been/is blackmailing Joe Biden (as they’ve got far more dirt on Hunter’s and Joe’s corruption than is on Hunter’s laptop, which the left wing news media censored to defeat Trump), don’t expect the Big Guy to do anything to reduce Chinese carbon emissions and pollution.

    1. When the rest of the world cuts carbon emissions, it means Chinese factories will be hummin’ making high margin items with rare earth metals. They’re happy to enter into agreements. Living by them is another question entirely. Who’s going to enforce the agreement? What are they going to do if China cheats? Are the Democrats and the Europeans going to reopen coal and natural gas plants in retaliation?

      1. Nuclear! The US left won’t allow it though, but EU may reverse course.

        1. Nuclear is the true hypocrisy of enviro-nuts. If CO2 is an existential threat to life on Earth, then all options should be on the table. They conveniently disregard the most viable option for reducing carbon emissions: nuclear.

          But that’s because the agenda of the powers that be are mostly about promoting their pet industries, solar and wind.

          Just before leaving public office in 2001, Gore reported assets of less than $2 million; [2012], his wealth is estimated at $100 million.

          1. “Nuclear is the true hypocrisy of enviro-nuts. If CO2 is an existential threat to life on Earth, then all options should be on the table. They conveniently disregard the most viable option for reducing carbon emissions: nuclear…”

            This is what tells you watermelons are not concerned about the environment, they are pushing a post-Mosiac religion, complete with a formerly ‘pure’ Edenic state and a coming rapture.

            1. You give them too much credit. They mostly just want to profit off of solar and wind.

        2. I hope my point is getting across that unless there’s a enforcement mechanism, there is no reason to expect China to make painful changes to their economy.

          Meanwhile, no legitimate enforcement mechanism is possible.

          Again, what are we going to do to them if they fail to comply? Will Biden and the EU send them a strongly worded letter of protest?

          We can’t even get NATO members to spend what they promised on their own defense! Why should China abide by any agreement that causes them pain–because they pinky promised?!

          1. I hope my point is getting across

            It did. Expecting the CCP or any country for that matter to just abide by international rules is crazy unless your prepared to back it up. What people always forget (not most here) is that all laws/treaties are backed by force.

      2. The point I was trying to make was that climate change alarmists/activists in the US and Europe should be far more concerned about (and interested in reducing) the ever increasing emissions in China (than the declining emissions in the US and Europe).

        If they truly wanted to reduce overall carbon emissions, Bill Gates, Mike Bloomberg, John Kerry, Al Gore, Greenpeace and other left wing climate change alarmists should be protesting China.

        And of course, the US (and many other countries) should become like France, developing and relying upon carbon free nuclear power.

        1. And if they truly wanted to reduce overall carbon emissions, Bill Gates, Mike Bloomberg, John Kerry, Al Gore and other hypocritical left wing climate change alarmists would sharply reduce their own carbon footprints before demanding everyone else do so.

  11. I don’t get it. Raising prices to the consumer for high-pollution and hidden-pollution products is the goal of carbon pricing.

    If carbon tariffs pass the costs on to consumers, then it sounds like it would be an effective policy tool that fulfills its goal.

    If high pollution and hidden pollution industries feel the type of disruption that the trade war has caused, then carbon tariffs sound like an effective policy tool that fulfills its goal.

    If consumers at the checkout counter find it hard to pay for the true pollution costs of high pollution and hidden pollution imports and buy less, then carbon tariffs sound like an effective policy tool that fulfills its goal. (For anyone upset about consumers being able to buy less, there’s the option of subsidizing low-pollution alternatives)

    This whole article seems to be missing the fact that bad side effects typical of taxes and tariffs become desired side effects when it comes to addressing pollution and negative externalities. It seems to be misunderstanding how Pigouvian Taxes are supposed to work in practice.

    1. The concept of Pigouvian Taxes sounds good in the theoretical abstract. The problem is, how do you know that any given tax is really a Pigouvian tax, or is really just the government trying to manipulate your choices via taxation?

      1. No, that’s exactly what Pigouvian Taxes do. They are *supposed* to manipulate choice via taxation so that people choose less often to take actions that harm others (negative externalities).

        1. No, a Pigovian tax isn’t supposed to explicitly manipulate anyone, it is supposed to, at least theoretically, pay for the cost of the negative externality.

          The problem is, no one can really say with much rigor what the true cost of a negative externality really is, and so politicians end up making up their own wild-ass numbers for the tax, which may or may not pay for any negative externality, but which DO serve the purpose of manipulating consumers.

          1. Paying the costs of negative externalities is the tool, biasing choices away from negative externalities is the goal. BUT MOVING ON from the nitpicking over Pigouvian Taxes.

            Carbon pricing is supposed to raise prices on high/hidden pollution products and services. The Democrats’ goal is to have less pollution. If consumers are manipulated into buying high/hidden pollution products and services less often then the Democrats’ goal of reducing pollution has been achieved and it has been achieved without introducing more government mandates.

            Carbon pollution is extremely well studied and has very thorough estimates of the economic and property damage caused by sea level change, more wildfires, and desertification. If it were any other topic than carbon pricing, you might have a point about arbitrary taxation levels.

          2. I would agree no tax is in actuality, as the tax paid has no connection to the externality it supposedly paying for.
            There is no way to connect them except in very vague abstractions. The whole argument is a purely theoretical construct.

        2. reminds me of the poster ‘Chad’ from 10-11 years ago.

          I miss ‘Joe’ too.

          Two good libertarian posters.

          1. What did they do, reach puberty?

            1. Maybe they all got locked up for kiddie porn.

    2. Furthermore, the overall better approach, instead of having Pigouvian taxes to pay for negative externalities, is to simply have fewer negative externalities overall.

    3. “”I don’t get it. Raising prices to the consumer for high-pollution and hidden-pollution products is the goal of carbon pricing.””

      I thought the goal was to reduce carbon output?

      1. Yeah, I misspoke. Raising prices is the *intended effect* so that markets will favor less consumption of high/hidden pollution products/services, more efficient use of high/hidden pollution activities, or low-pollution alternatives.

        1. Not so sure, raising prices often leads to government subsidies.

        2. Liberals. Helping the poor by making things more expensive.

  12. General question:
    Should the government attempt to manipulate, or ‘nudge’, consumer choices via the power of taxation?

    1. Specific question:
      Are you stupid enough to ask that question?

      1. A individualist would say no.

    2. Well, we principled libertarians know the government should nudge people to learn about critical race theory.

      In fact public school children should be outright required to learn about this rigorous field of academic study. After all, the ABA definition of CRT makes it sound entirely un-controversial.

      #RadicalIndividualistsForRacialCollectivism

    3. Uh… no.

      Two primary reasons in my mind:
      1) Relying on the “experts” in the government to tell us how to live our lives isn’t exactly freedom.
      2) This ultimately leads to cronyism.

    4. Principles shminciples All that matters is the Party in power. If it’s your team then yes. The other team then no.

    5. No. It was wrong when Obama did it, it was wrong when Trump did it, and it is wrong now that Trump II is doing it.

      1. Don’t forget Bush II. Oh and Johnson, Hoover, Harding. Tariffs enjoy bipartisan support! Hoorah!

      2. But no more mean tweets so you’re happy, right, TDS-addled asshole?
        Unfortunately, we got what YOU deserve.

      3. Oh, and BTW:
        “…now that Trump II is doing it.”

        “Trump II” with a $3.5Tn price tag, TDS-addled asshole?

        1. The $2.3T version feels so much cheaper now.

          1. Indeed it does. Happy now?
            We also got lower taxes, two SCOTUS members who aren’t capsizing to the left, but YOU simply couldn’t stand those mean tweets.
            You deserve this; I don’t.

            1. Trump is MR 1% GDP you asswipe.

              Biden starts with a 7 handle (thanks to wads of stimulus money)

              1. Thanks more to an economy killed last year by government lockdowns.

              2. If turd posts *ANY* statistic at all, you can safely assume it is cherry-picked to favor the D’s.
                If turd were ever honest, the earth’s rotation would reverse; turd lies. Every post from turd is a lie.

    6. No. Government should focus on taking military action against Syria, locking up foreign kids in cages, rewarding campaigners with stimulus money and coercing social media outlets into favorable censorship.

  13. Looks like the NFL is going to replicate the disastrous decisions by NBA and MLB to insult white Americans and Republicans by playing the race card at all NFL games, and will also likely experience a sharp reduction in television viewers.
    https://townhall.com/tipsheet/leahbarkoukis/2021/07/16/nfl-black-national-anthem-n2592637

    Nothing like the wealthiest blacks in world history falsely portraying themselves as victims of white suppression.

    1. That’s right. Because forced conformity to a civic religion is what America is all about!

    2. “America is all about freedom! And to prove the point, I’ll make you stand and listen to the National Anthem which talks all about freedom! And if you don’t like it, you’ll be fired! That’s what freedom is all about!”

    3. Will white players be allowed to take a knee while it’s being sung?

      1. Sure if they are going to retire at the end of the year and no longer need endorsement contracts.

        1. How’s Colin Kaepernick’s endorsement career going? He had some glory there for a while, back when the media was eviscerating Betsy Ross and treating arsonists like heroes. But there’s no way Kaepernick’s career or endorsement deals went better than they would have if he hadn’t offended the patriotic sensibilities of so many people.

          I think this might be instructive, going forward, as NCAA athletes start getting endorsement deals of their own. If selling your name on jerseys or your likeness on merchandise is limited by your personal appeal to, say, the alumni at Ohio State or LSU, your incentive to do things that offend the patriotic sensibilities of the alumni may be limited by your desire to line your pockets with their money.

        2. I wonder if Drew Brees’ retirement was in part due to the negative backlash he received by woke Americans, including some players.

    4. Cawcasian Mike is happy.

  14. Climate change causes higher taxes.

    1. The carbon footprint of social programs is enormous.

  15. Fuck Biden and his tariffs.

  16. Halfway through Gunpower Milkshake. Has to be one of the worst movies I’ve ever seen. Love it.

  17. Wouldn’t this system impose high tariffs on solar panels? Given that they are most likely made using lots of coal. This would make using coal cheaper.

  18. Fuck you Eric, by the time Biden gets through destroying the dollar’s value you wont afford to buy foreign goods anyway.

  19. I remember hearing a story about a ruler who noticed birds were eating a lot of the people’s crops so he ordered the people to kill all the birds. Once the birds were all killed, the insect population exploded and the insects ate even more crops than the birds did. I’m sure nobody would be stupid enough to do such a thing in real life, but it’s a cautionary tale about unforeseen consequences and the hubris of thinking you can manipulate nature so easily. Perhaps before you tax “high polluting” items and subsidize “low polluting” items, you’d better be sure which is which and to what extent.

    For example, I just read an article about how much methane is produced by hydroelectric dams that stir up and recycle decaying plant matter that suggests hydroelectric isn’t quite as green as people may believe. Then there’s the whole question of just how much pollution battery production for all those “clean” electric vehicles causes and how much pollution is caused by the production of solar panels and windmills. Maybe we aren’t as knowledgeable as we think we are.

    1. This is assuming the goal is as stated and not an agenda to destroy Capitalism and private property rights.

      1. The goal and the agenda are pretty much the same thing, aren’t they? Read the UNICEF take on the issue if you doubt me. They are concerned with the supply of drinkable water to the children of the world, for example. Their solution? Hint: it’s not privatizing the world’s supply of potable water.

    2. The story you heard is that of Mao and the four pests – flies, rodents, mosquitoes and sparrows.

      ” the hubris of thinking you can manipulate nature so easily”

      Increasing or decreasing taxes and tariffs is not manipulating nature. It’s making adjustments to the way people distribute wealth among themselves. Completely artificial.

      The problem with pollution associated with battery production is real but the real problem is that producing just about anything has associated pollution. Even so-called zero carbon tech like nuclear has an enormous carbon footprint just in all the concrete and steel that is required.

      1. The campaign against the fourth pest, sparrows, apparently was halted after two years when Chinese scientists discovered that sparrows eat insects too and that rice harvests had plummeted after the destruction of huge numbers of sparrows. Sparrows were removed from the list and replaced by bed bugs, according to wikipedia. Recent attempts to replace the fourth pest with cockroaches have not met with enthusiasm as Chinese already typically kill any cockroaches they encounter without the need to be included in any government list of pests.

        1. “…and replaced by bed bugs, according to wikipedia…”

          trueman pretends to be educated.
          Busted again, bullshitter.

  20. The innocent must be punished. What better way to do this than create tariffs.

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