EU Rejects Carbon Mechanism is Tariff Amid U.S. Criticism

Brussels has rebuffed accusations that its new Carbon Border Adjustment Mechanism (CBAM) functions as a tariff, asserting it is a vital climate tool. The European Commission defended the mechanism on Thursday, countering claims made by the U.S. ambassador to the EU, Andrew Puzder.

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a double standard

Puzder had criticized Brussels in an opinion piece, alleging a "double standard" for condemning U.S. tariffs on steel and aluminum while implementing what he described as a "protectionist barrier disguised as climate policy." He argued that U.S. tariffs are justified by national security concerns related to overcapacity, particularly from China.

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a protectionist barrier disguised as climate policy

However, a Commission spokesperson clarified that the CBAM is designed to prevent carbon leakage and support global decarbonization. The mechanism ensures that imported products bear the same carbon price as those produced within the EU's Emissions Trading System. The spokesperson emphasized its non-discriminatory nature, stating it complies with World Trade Organization rules and applies equally to all countries based on verified embedded emissions.

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a climate measure designed to prevent carbon leakage, support global decarbonization

Unlike traditional tariffs, the CBAM will impose lower or no obligations on goods with a low carbon footprint. The Commission also highlighted that any carbon price already paid in a third country for a product's embedded emissions can be deducted from the CBAM obligation, preventing double taxation. "Therefore, we do not share the comparisons with unilateral tariff measures," the spokesperson concluded, reaffirming the EU's regulatory autonomy.

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non-discriminatory