EU's carbon border tax on heavy industry goods goes into effect risking trade escalation

Imports of steel, aluminium, cement and other heavy goods to the European Union will start paying for the CO2 emissions they produce from 1 January, as the bloc seeks to protect EU manufacturers facing more stringent obligations compared to foreign peers.

While the measure is meant to ensure fair competition for European industries, the EU’s carbon border tax, the Carbon Border Adjustment Mechanism (CBAM), may create trade frictions and lead to disputes with non-EU countries, further exacerbating the trade feuds dominating the international stage since the arrival of Donald Trump to the White House with an aggressive global tariff policy.