The Supreme Court’s ruling in the tariff case this year was a painful blow for advocates of using protectionism to reshape global trade. While the tariffs in question, which had been levied under the International Emergency Economic Powers Act, accounted for less than half of President Donald Trump’s tariffs, the ruling nevertheless halted the administration’s ability to set reciprocal tariffs. While it has found some temporary workarounds, such as Section 122 tariffs, they are far from permanent.
This is a problem for the Trump administration’s goal of reshoring and reindustrializing the United States. Tariffs, which can be rather broad or very narrow, were an effective tool for the Trump administration’s goal of reshoring U.S. companies and reindustrialization. They were also starting to be accepted across the political spectrum, an under-discussed victory for the president. Having begun pushing protectionism in his first term, many of the president’s tariffs were kept by the Biden administration without complaint from Democrats.
But ironically, the Supreme Court’s decision could help further all of these goals by giving Trump an impetus to try tariffs in a new way: pollution tariffs, specifically on major adversaries such as China.
THE FOREIGN POLLUTION FEE: A WIN FOR AMERICA FIRST TRADE
Chinese pollution is a well-known problem and has become so far-reaching that it has found its way into U.S. water and air.
And that pollution has powered a machine that has stolen U.S. jobs for decades. China has a population roughly four times the size of the U.S., for starters, and it’s capable of mass-producing cheap goods. U.S. businesses, by contrast, operate under a heavy regulatory burden; even with the Trump administration’s repeal of the endangerment finding, which allowed the Environmental Protection Agency to regulate greenhouse gases, there is still a punishing network of cost-driving regulations on both the federal and state levels. This helped create a near-impossible business climate, or at least an expensive one. And starting in the 1990s, China was able to take advantage of this and absorbed hundreds of thousands of U.S. jobs because it allowed its companies to pollute at no cost.
In 2022 alone, China constructed six times more new coal power capacity than the rest of the world combined and has not slowed since. Uncoincidentally, China is the world’s largest emitter of hazardous air pollutants, including mercury, particulate matter, and nitrogen oxides.
In contrast, studies consistently find that U.S. manufacturing emits significantly fewer of these types of pollutants.
The U.S. cannot do anything about the number of people in China. But the U.S. can absolutely do something about China’s pollution, as that advantage is actually a crutch for the Chinese. If the U.S. were to tariff that pollution, China would be trapped.
Some conservatives may hesitate to do something on pollution, as the climate agenda has been a Trojan Horse for progressive policies. But there is a clear, national-interest-based cause for action here. It is the height of geopolitical malpractice to allow an adversary to have such a massive advantage over U.S. workers. With a pollution tariff, the administration can take a massive step toward leveling this historically unfair playing field.
There are a few ways the Trump administration can put forward such a tariff, even with the IEEPA being taken off the board by the Supreme Court. Section 301 tariffs, for example, allow the imposition of levies when a country acts in a manner that is “unreasonable or discriminatory and burdens or restricts United States commerce.” It does not take a wordsmith to argue that de-industrialization puts U.S. producers at a disadvantage.
The administration could also urge Congress to pass legislation specifically authorizing a pollution tariff. It is something that very well could get through Congress, even in these times of partisan gridlock.
TRUMP GOES SCORCHED EARTH AGAINST ‘WEAPONIZED AND UNJUST’ SUPREME COURT
If such a tariff is broad-based — targeting all countries that pollute more than the U.S., with carve-outs for allies — Trump can ensure other countries cannot lower their own standards and take the cheap way out.
Whichever way the administration chooses to move forward, it should do so quickly. Every day without action is another day for China to steal U.S. jobs and pollute without response. The time is ripe for action.
Anthony Constantini is a policy analyst at the Bull Moose Institute.