Advantage one turns advantage 2. The imposition of carbon tariffs increases prices for consumers in the lowest tax bracket, widening the wage gap.
Eric Boehm 23, reporter at Reason who covers economic policy, trade policy, and elections, Boehm received a bachelor's degree in history and communications from Fairfield University, "Tariffs Targeting Carbon Emissions Would Be a Costly Blow to Free Trade," https://reason.com/2023/01/20/tariffs-targeting-carbon-emissions-would-be-a-costly-blow-to-free-trade/
Advocates for free trade say the looming carbon tariffs are a threat to American consumers and businesses—and draw a clear line from Trump's abuses of Section 232 to Biden's abilities to do the same.
"Section 232 will haunt us like a protectionist Frankenstein unless Congress acts to rein in executive abuse of the law," then-Sen. Pat Toomey (R–Pa.) warned in December during his final remarks on the Senate floor. In an interview with Reason last month, Toomey said Biden was taking Trump's "abuse and the misuse of the Section 232 provision to a new extreme" by proposing the carbon tariffs.
"It's effectively a border adjustment with respect to steel and aluminum, based on carbon emissions," Toomey said of Biden's reported plan for carbon tariffs. "This is wildly incompatible with what Section 232 actually says. It is a grotesque overreach by the Biden administration, and this is exactly what I've been warning my colleagues of for quite some time now."
Regardless of whether the tariffs are implemented for domestic political reasons or in pursuit of an amorphous plan to address climate change, the economic costs are indisputable. The Peterson Institute for International Economics, a trade-focused think tank, estimated that every job saved by Trump's tariffs on steel cost consumers roughly $900,000 in higher costs created by the tariffs.
It's fair to expect a similar result from any new tariffs aimed at cutting carbon emissions—because the laws of economics don't care about the intentions of policy makers.
"Americans are the ones who are going to pay those taxes. If you're a consumer or a business, you're going to end up paying those costs—without any input from Congress," says Bryan Riley, director of the Free Trade Initiative at the National Taxpayers Union, a free market think tank.
Riley says new tariffs aimed at carbon emissions are also likely to give bureaucrats huge new powers over the costs of imports since someone will have to decide how much to tax steel from France vs. steel from Canada vs. steel from China or elsewhere in the world.
"It's going to create a huge new regulatory bureaucracy that lets the government pick winners and losers," says Riley. "That's my No. 1 concern."