On Thursday, Earth Day, President Biden has an opportunity to make good use of the virtual summit on climate change to which he has invited 40 world leaders, including China’s president, Xi Jinping. He can demonstrate the seriousness with which he views the warming of the planet by announcing that he will impose a border tax on the carbon content of America’s imports. Xi, who presides over the economy that is the world’s largest emitter of greenhouse gasses, will not be happy.
“The U.S. has neither the moral standing nor the real power to issue orders to China over climate issues,” said the state-controlled (there are no other kind) Chinese newspaper, the Global Times, on the eve of American climate czar John Kerry’s visit to Shanghai to meet with his Chinese counterpart. Fortunately, the communist party newspaper is wrong. And Xi knows it. Biden has the weapon to make China do what he wants it to do, or pay a high price. We have power to force China to reduce its contribution to heating the planet. We can join the EU in imposing border taxes on the carbon content of China’s exports, close to 40% of which are sold to us and the EU.
Xi worries about that possibility, as he made clear last week when he professed outrage at the EU’s plan to develop what it calls a Carbon Border Adjustment Mechanism, bureaucratese for a carbon tax, on exports to the EU. China is undoubtedly the world’s largest emitter of greenhouse gasses, accounting for 28% of the world total, from its own factories, and more if emissions from the hundreds of long-lived coal plants it finances around the world are charged to its account. Xi has announced that China will continue to increase its CO2 emissions until 2030, while demanding that other signatories to the Paris Accord, which now includes the U.S., reduce emissions – at a rate that will be even more rapid than now planned if President Biden responds affirmatively to the hundreds of U.S. businesses that are demanding that he lower the targets to which American has already agreed.
China’s Vice Foreign Minister, Le Yucheng, joined Xi’s attack on the U.S. approach to climate change – “too negative” and lacking “a forward-looking spirit.” According to Politico, he added, “Some countries are asking China to do more on climate change. I am afraid that is not very realistic.” Which will prove to be true, but only if the Biden administration, which is putting the heat on American polluters to reduce emissions, leaves China unaffected by its current behavior.
By imposing a border tax on imports, America will be joining the EU, and make Chinese goods more expensive in its two largest markets. That, in turn, would make it more difficult for China to attain the rapid growth it needs to keep its masses, now being administered Chinese vaccines with a mere 50% efficacy, sullen rather than mutinous. And at no cost to American consumers. Here’s why.
Americans are now paying the cost of China’s emissions. Those emissions are contributing to the ills and attendant costs ascribed to CO2 emissions. Those costs are hidden, not reflected in the prices of Chinese goods that dominate so many markets, but very real nevertheless, paid by consumers in the form of a degraded environment. In effect, by selling us “dirty” products, China is adding to the competitive advantage it has from selling us stuff made by slave and other laborers paid wages with which we cannot decently compete, around $2 per hour in Beijing. That advantage is very likely to increase as American labor markets recover from the forced closing of our economy in response to Covid-19, and if the President’s drive to increase the degree of unionization of the American economy is successful. Just ask any “union guy”, as Biden calls himself, what competition from Chinese labor has done to American industries and workers.
By sending us goods with heavy carbon content, China is undermining the President’s vigorous attack on climate change, and the effectiveness of anything he might announce at the climate summit. Kerry and the Biden cabinet, told to put fighting climate change at the top of their agendas, know that. They know, too, that we have the power to help the President achieve his goals, and in the process discomfit our number one international competitor.
Equally important, a border tax offers two advantages for those unsure the globe is warming, or certain that it isn’t, or who believe that technology will prove the answer in the long run. First, such a tax would contribute to reducing the deficit that is the price of relieving suffering from the pandemic and further expansion of social spending. Second, it would reduce the gap between U.S. costs and the prices of Chinese goods that benefit from poorly paid and slave laborers, and the absence of enforced regulations on carbon emissions. There are fewer easy ways of improving our competitive position vis-à-vis what the CIA argues is a nation determined to seize world leadership from us.