A push for stronger climate policy should unite Americans and Europeans. It might be raising trade tensions instead.

The Inflation Reduction Act was a signal that America is a serious player in global climate negotiations. European countries, however, worried the bill would be a threat to their domestic manufacturers and took their complaints directly to the Biden Administration.

The EU responded by proposing a Green Deal Industrial Plan, which will match American subsidies to clean-energy manufacturers. European officials are also pursuing a green tariff in 2026, which would tax imports of carbon-intensive goods. 

How will this transatlantic industrial arms race play out? And will it cause trade disputes between the U.S. and EU to escalate?

This week, host Bill Loveless talks with Noah Kaufman and Sagatom Saha.

Noah is an economist and research scholar at the Center on Global Energy Policy. He served as a senior economist at the Council of Economic Advisers under President Biden. He also served as the deputy associate director of energy and climate change at the White House Council on Environmental Quality under President Obama.

Sagatom is an adjunct research scholar at the Center on Global Energy Policy and is an expert on the global energy transition and America’s competitiveness in clean energy technologies. He previously worked on cleantech competitiveness at the International Trade Administration in the U.S. Department of Commerce, and served as an adviser to John Kerry, the U.S. special presidential envoy for climate. 

Noah, Sagatom, and two of their colleagues, Chris Bataille and Gautum Jain, recently published an article in The Conversation about how conflicting carbon tariffs could undermine climate efforts. Bill talks with them about the details of the U.S. and EU's domestic industrial policies, and why tensions are flaring between them.