The first few weeks of President Trump’s administration have made clear that a centerpiece of his agenda will be resetting the way America interacts with allies and adversaries on trade policy. He’s not alone, with many world leaders already demonstrating how they view trade policy as a critical lever to advance their policy objectives. Whether the end goal is promoting the competitiveness of domestic producers in foreign markets or changing other countries’ broader behaviors, trade policy is increasingly being used in innovative ways to expand the policy toolbox. 

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Given this reality, it’s no surprise that U.S. lawmakers have introduced or co-sponsored legislation that would have wide-ranging impacts on sectors that produce or import carbon-intensive goods. The approaches, intentions, and goals of these bills vary widely. However, at their core, each measure aims to create methodologies and collect data on global carbon emissions, incentivize other countries to decarbonize their manufacturing sectors, and place cleaner American industries on a level playing field with foreign competitors. 

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Despite traditional Republican skepticism toward climate-related regulations, carbon border legislation has maintained traction under a GOP-led Congress and Administration, particularly as part of broader trade and economic policy discussions. For example, Sens. Bill Cassidy (R-LA) and Lindsey Graham (R-SC) are championing an approach that would impose a border fee on imports from countries with weaker emissions standards to protect American manufacturers from foreign competitors that operate with less stringent environmental protections. This approach aligns with Republican priorities of boosting the domestic manufacturing base, combatting China’s supply chain dominance, and leveraging trade policy as a tool for economic gain. 

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On the other side of the aisle, Democrats tend to view carbon border legislation as a component of their broader climate policy agenda to promote decarbonization. The party is also more keen on coupling a carbon border measure with a domestic price on carbon, which Republicans have staunchly opposed. Despite these differences in approach, the concept behind carbon border legislation is generating uniquely strong and increasingly rare bipartisan support.

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For the GOP, framing such a measure as an America First approach to improving U.S. manufacturing competitiveness – rather than a climate-focused action – and steering clear of a domestic carbon tax, could result in Republicans coalescing around the idea. Cassidy has proposed a carbon border fee as a spending offset in budget reconciliation talks, though other Republicans may hesitate to throw their support behind the idea in the near-term unless President Trump signals his endorsement. 

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If carbon border legislation is not included in budget reconciliation, the concept is unlikely to fade in either party as Republicans seek to ensure American businesses are not disadvantaged by competitors with weaker environmental standards, Democrats aim to strengthen climate policy on a global scale, and both parties recognize the need to provide policy support to domestic industries as other countries inevitably move forward with similar border measures. 

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About the Trade & Carbon Legislation Explorer

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In response to these policy conversations, and to help inform them, the team at Lot Sixteen has developed a Trade & Carbon Legislation Explorer to help you navigate the nuances and better understand how Congress is thinking about measuring and taxing the carbon emissions tied to goods traded in international markets. This interactive tool lets you compare various legislative provisions and helps you determine how each bill could impact different industries. 

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Our team has taken a series of steps to make sure the Trade & Carbon Legislation Explorer is accurate and useful, including (1) a careful review of each bill; (2) identification of categories of similar provisions across each bill; (3) synthesis of each bill’s content in each category; and (4) identification of bill sections where each provision can be found. Using this tool, you can filter and search across bills and categories for easy comparison. You can also choose to compare among bills that have been introduced in the current Congress or among all bills that have been introduced on the topic. And for each bill, we have developed analyses that explain the purpose, scope, and provisions with background on the sponsors’ intentions behind their legislation. 

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Explore the tool here, and get connected with our Trade Team to learn more.