In July, the European Union announced the implementation of their Carbon Border Adjustment Mechanism. While it sounds like a highly technical and complicated policy, it is simply a tariff on businesses from countries without a carbon pricing law. The United States is one of the countries without a price on carbon and therefore American companies will be forced to pay a tax to the EU in order to export their products. Having to pay an additional tariff will force American companies to increase their prices and will thus become less competitive in international markets.

What can the United States do about this problem? The answer is simple, we must pass and implement a carbon pricing law. Only a price on carbon will allow American businesses to avoid paying higher international tariffs. The House and Senate are deciding what climate measures to include in the $3.5 trillion reconciliation package and in order to keep the American economy competitive, we must urge our Senators and Representatives in Congress to support a carbon pricing law.