The EU and USA are allegedly in early talks about slapping a climate levy on imported steel and aluminum from China, reports Bloomberg News based on information from unnamed sources.

Pending agreement, imposing such a tax would constitute a wholly new approach to punitive import tariffs, usually a tool only applied in connection with trade spats – not as a means to advance the climate agenda.

First aired by US President Joe Biden’s White House administration, the idea remains in early discussions, and an official proposal has not yet been made. Full ratification, assuming that parties reach an accord, would likely first occur late next year.

The measure would probably have a scope extending to numerous carbon-intensive nations, however mainly targeting China, both the world’s largest greenhouse gas emitter and biggest producer of steel and aluminum globally.

This news follows initial restoration of confidence among the three economic powers after former US President Donald Trump started a trade war with during his term, not merely with China, but also with the EU, Canada and Mexico.

Such improvement notwithstanding, new fractures have also since emerged after the US passed the Inflation Reduction Act, earmarking several hundred billion dollars for incentivizing climate investment by offering tax credits.

The EU sees the package as an example of economic protectionism favoring US businesses.

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