Illustration: Gabriella Turrisi/Axios
President Trump's Cabinet picks have offered conceptual support for carbon tariffs, giving the idea fresh momentum as the administration pursues an aggressive trade agenda.
Why it matters: Sen. Bill Cassidy has been tinkering with his Foreign Pollution Fee Act proposal in hopes of getting it in the mix for a reconciliation bill or a Trump tariff regime.
- But it's still a long road to reality.
What they're saying: Treasury pick Scott Bessent and DOE nominee Chris Wright offered some support for Cassidy's bill — if not full endorsement of it —during their confirmation hearings.
- "I think this is a very interesting idea that ... could be part of an entire tariff program," Bessent said in response to a Cassidy question.
- Wright called it "a creative idea about how do we address some of these asymmetries that have developed" between the U.S. and China.
- Sen. Kevin Cramer told Axios he has also talked about a "pollution tax" as part of a larger tariff regime with Commerce pick Howard Lutnick, who's in line for a confirmation hearing next week.
Zoom in: Cassidy reworked his legislation late last year into a new "discussion draft."
- Broadly, it would still impose a fee on industrial imports — but not domestic products — based on their greenhouse gas emissions.
- The new version would cover hydrogen, iron, steel, cement, aluminum, glass, and fertilizer — dropping natural gas, oil solar panels and other energy products from the initial proposal.
- Cassidy has been soliciting feedback with the goal of reintroducing it again in the first quarter of this year.
Yes, but: Without Trump's explicit blessing, many political hurdles remain.
- Any policy that could be construed as a carbon tax remains politically toxic in much of the GOP.
- Republicans got intense pushback from both ideologues and refiners for trying even a modest step toward carbon tariffs in the PROVE IT Act.
- "It'd be an internal brawl unless the president himself gets on board," Cramer said.
Cassidy was similarly restrained when Axios asked him Thursday about the Cabinet comments.
- "Of course, when people are coming before you to get your vote, they haven't taken a position … but conceptually they're OK with it," he said.
- But he said he's gotten "very positive feedback" from his comment period on the bill: "Some folks that maybe we were concerned about being opposed seemed to have come across as neutral."
What's next: Cassidy said he doesn't have a specific timeline yet for reintroduction.
- In the meantime, we're watching to see whether lawmakers reintroduce PROVE IT, which would direct the Energy Department to study emissions from industrial products made in the U.S. and abroad.
- DOE also started its own pilot project late last year to effectively achieve that goal.
