EU leaders risk trade tension with carbon border tax to protect industry

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EU leaders risk trade tension with carbon border tax to protect industry
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The new European Union executive risks stoking international tensions over trade...

LONDON - The new European Union executive risks stoking international tensions over trade and the environment even before it takes office in November by promising a carbon border tax to shelter its industry from the cost of cutting emissions.

Until now, the Commission has handed out free ETS permits to tackle industry’s complaints it is subject to “carbon leakage,” the term used to refer to the possibility high EU compliance costs will drive manufacturers to move their plants to lower-cost parts of the world. History suggests the United States and China will respond if the Commission’s proposal ever becomes law.

In policy guidelines, Ursula von der Leyen, the German president-elect of the new Commission, said she would introduce a carbon border tax, starting with selected sectors.

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