October 4, 2019

Andrew Campbell 

On October 2nd the US announced to impose 10% tariffs on Airbus aircraft for illegal subsidies received from EU and 25 % duties on French wine, Scotch and Irish whiskeys, and European-made cheese as well. The ongoing trade war between the EU and the US was seemingly worsened on October 3rd after the nominee of EU tax commissioner, Mr. Paolo Gentiloni, revealed his new tax plan targeting primarily American polluting firms during his confirmation hearing. Prior to the EU's tax commissioner-designate, who will take his office officially in the coming November, however, Mr. Gentiloni, Italy's former prime minister, described the Carbon Border Tax plan as very quick and effective in penalizing foreign firms with high greenhouse gas emissions.

For years the US has been reluctant to reduce carbon emissions, which is necessary for satisfying the requirements in accordance with the Paris Agreement, the international climate protection deal signed in Paris within the United Nations Framework Convention on Climate Change in 2016. US President Donald Trump has expressed on numerous occasions that his administration will withdraw from the Paris Agreement after its expiration date on November 4, 2020.

The European Union Emissions Trading System (ETS) has been the world’s first and biggest greenhouse gas emissions trading scheme to fight global warming since it was launched in 2005. The ETS has become a major pillar of EU energy policy. Mr. Gentiloni said the European Commission will soon start by means of ETS as the flagship instrument to work on Carbon Border Tax targeting on foreign polluting firms based in countries where climate protection regulations are not strict. The tax is meant to shield European companies from foreign competitors and make them pay. The European Commission would begin working on a proposal for an EU digital tax

Photo:Webshot.