THE VINE JUNE 29, 2009
John Broder of The New York Times has a story today about a provision in the House climate and energy bill that was tucked in at the last minute, requiring the White House, starting in 2020, to impose a carbon tariff on China or any other country that doesn't adopt its own limits on greenhouse-gas emissions. (The White House would have to get explicit congressional approval to waive these tariffs.) This comes on the heels of a new WTO ruling giving tentative approval to these sorts of border-adjustment taxes.
Officially, Obama is against this provision, saying, "I think we have to be very careful about sending any protectionist signals there." I've written about this before, and I agree: It would be infinitely preferable to cooperate with, say, China on a constructive climate agreement than to strong-arm the country via import restrictions. A global trade war, with tariffs and counter-tariffs and retaliation left and right, really could be disastrous. So I doubt this provision will survive the Senate. (One possibility: Lawmakers would go back to the original language, which gave the White House the option of imposing tariffs, but didn't require it to do so.)
That said, a number of China experts have suggested to me that China's eagerness to talk with the United States about climate change stems, in part, from their fear of a gory trade war. So it's perfectly conceivable that the House may have strengthened the Obama administration's position in its ongoing talks with China. U.S. negotiators can say, "Look, we don't want a trade war, but we're having a hard time restraining Congress, so it's important that we work these issues out before protectionists in the House and Senate do something really stupid."
(Flickr photo credit: Edward Horsford)