Carbon-Tariff Policies Heat Up The Chinese

No surprise this. China is ratcheting up its opposition to tariffs tied to greenhouse gas emission policies.

From the WSJ:

China’s central government reiterated its opposition to carbon tariff policies and said they could provoke a trade war, ratcheting up the rhetoric as lawmakers in the U.S. consider legislation to reduce greenhouse gases.

A statement Friday on the Web site of China’s Ministry of Commerce cited proposals in some nations to level tariffs on imports from countries that don’t limit greenhouse gases. Such policies violate World Trade Organization rules and are “not timely” ahead of global climate change talks later this year, spokesman Yao Jian said in the statement.

“China has consistently advocated that the international community faces climate change together, but some developed countries have advocated using carbon tariffs against imports,” Mr. Yao said. “This violates basic WTO rules. It only pretends to protect the environment, but really it protects trade.”

Although President Obama had come out in opposition to the parts of the bill that might impose tariffs, I wonder, as I wrote earlier if faced with the prospect of a bill that included them versus getting no legislation at all, which direction he would go. I think that cap-and-trade faces tough sledding in the Senate but if it is going to pass, it most certainly has to include tariffs. There is simply no way to get enough Democrats on board without giving them that sort of political cover.

It will be an interesting test for the President.

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