The U.S. and EU are weighing new tariffs on Chinese steel and aluminum as part of a bid to fight carbon emissions and global overcapacity, according to people familiar with the matter.
The move would mark a novel approach, as the U.S. and EU would seek to use tariffs — usually employed in trade disputes — to further their climate agenda. U.S. aluminum and steel producers climbed in extended trading.
The idea, generated within U.S. President Joe Biden’s administration, is still in an initial phase and hasn’t been formally proposed, according to the people, who asked not to be identified as the discussions aren’t public. An agreement with the EU, including specifics on how to identify thresholds for applying tariffs, isn’t likely until late next year at the earliest, one of the people said, adding that even that timeline was optimistic.