Key Senate Republican Urges Trump to Add ‘Foreign Polluter Fee’ to Possible Tariff Mix

President Donald Trump speaks during a news conference in the Roosevelt Room of the White House on Jan. 21, 2025. Andrew Harnik/Getty Images

Some Senate Republicans want to give President Donald Trump another arrow to add to his tariff quiver in negotiating trade deals—a “foreign polluter fee” levied against imports with higher “pollution intensity” than similar products made in the United States.

While the proposed Foreign Pollution Fee Act co-sponsored by Sens. Bill Cassidy (R-La.) and Lindsey Graham (R-S.C.) never advanced after its November 2023 introduction, it’s likely to be reintroduced soon and could be incorporated into the president’s trade policies.

That was Cassidy’s pitch during interior secretary nominee Doug Burgum’s Jan. 16 nomination hearing before the Senate Energy and Natural Resources Committee.

With Trump speculating about levying surcharges of up to 25 percent on goods from Canada and Mexico, and anywhere from 10 to 60 percent on imports from China, a foreign polluters’ fee “would be a tariff that would be thoroughly defensible,” he said.

While the Biden administration was pushing renewable energies to meet decarbonization goals, spurring inflationary capital improvement costs on U.S. utilities and manufacturers, other nations haven’t similarly self-shackled, Cassidy said.

“One thing I’ve been concerned about is, countries like China do not enforce international standards on controlling pollution,” he said. “That lowers the cost of manufacturing as much as 20 percent, incentivizing manufacturers to leave our country and move there.

“Then,” Cassidy added, “we get the loss of jobs, but also all the air pollution that blows over to our West Coast. I think I read 20 percent of the smog in California is related to emissions from China.”

Smog from China—and, perhaps, the Cassidy–Graham bill—was on Trump’s mind on Jan. 20 when he told supporters at Capital One Arena that he was issuing an executive order to withdraw the United States from the “unfair, one-sided” Paris climate accords.

“You know,” he said, “China, they use a lot of dirty energy, but they produce a lot of energy, and when that stuff goes up in the air, it doesn’t stay there. It’s not like you have a wall—we love walls, by the way—it just doesn’t [stop at borders].

“It floats into the United States of America after three-and-a-half to five-and-a-half days. It floats across the oceans, and it comes right over your neighborhood, and it falls into your neighborhood.”

Trump said U.S. producers extract oil/gas and minerals under more environmentally strident regulations than most trading partners, especially China, and its natural gas emits less pollutants than rival producers, most notably Russia.

“They all say we have to fight for cleaner air, but dirty air is dropping all over us,” he said. “So what are they talking about? Unless everybody does it, it just doesn’t work.”

Whether Trump is using tariffs as leverage in negotiating trade deals, as revenue-generators, or both will be evident soon, but boosting U.S. natural gas production and increasing liquified natural gas (LNG) exports is a cherry he’s dangling in exchange for favorable pacts.

In his executive order “Unleashing American Energy,” Trump pledges to “expedite permitting and leasing of energy projects” and lifts the January 2024 new export permit pause imposed by the Biden administration.

A crew works on a natural gas rig in Zelienople, Pa., in 2012 after the "shale revolution" fostered by advances in fracking technologies unleashed a natural gas boom in the United States. Keith Srakocic/AP Photo

Fee Would Even Playing Field

The United States is the world’s largest LNG exporter. Under the Biden administration, however, exports were paused to study whether shipping fuel overseas was in domestic consumers’ “public interest” and whether exports would accelerate global greenhouse gas emissions.

Critics argue the LNG pause disrupted domestic production by creating uncertainty among investors in financing infrastructure projects such as pipelines and port terminals—creating a possible capacity shortfall in coming years—and was contrary to Biden’s own decarbonization goals.

According to the U.S. Energy Information Administration (EIA), natural gas emits fewer air pollutants and carbon emissions than burning coal or petroleum when producing an equal amount of energy.

A 2019 Department of Energy (DOE) analysis determined U.S. LNG exports over 20- and 100-year horizons would lower global greenhouse gas emissions, citing its “cleaner” burn than LNG from elsewhere, especially Russia.

Cassidy said assessing a “polluter fee” on countries using “dirty” energy not in compliance with United Nations and World Trade Organization (WTO) agreements would ensure “our industry is competitive in terms of controlling our emissions in accordance with the law, which then gives us that advantage relative to those competitors arbitraging those rules.”

Cassidy and Graham, in a press release, claim the Chinese Communist Party is exploiting “loopholes” in a trade system that “compensates them for their poor pollution record” while the United States is punished for its “stellar environmental record.”

“This combination undercuts U.S. manufacturing domestically and abroad causing the loss of millions of U.S. jobs and dependency on problematic supply chains,” the statement reads.

The bill establishes a foreign pollution fee (FPF) on imported products with a “pollution intensity” 10 or more percent higher than similar U.S. goods. FPFs would be levied against “energy products,” such as natural gas, oil, hydrogen, minerals, solar panels, and wind turbines, and “industrial products,” such as aluminum, cement, glass, iron, steel, petrochemicals, and paper.

The bill leaves rule-making, such as calculating pollution intensity, to the Department of the Treasury and the DOE’s National Laboratory system. The Office of the U.S. Trade Representative will monitor for circumvention. U.S. Customs and Border Patrol would collect the fee.

The World Trade Organization headquarters in Geneva on April 12, 2018. Fabrice Coffrini/AFP/Getty Images

Fee Would Be Challenged

Cassidy and Graham say an FPF based on “national sectoral emissions averages” would confirm U.S. energy is less carbon-intensive than global counterparts.

A May 2022 Center for Strategic International Studies (CSIS) analysis of a unilateral FPF raised numerous issues, including the need for more precise and standard emissions calculations, and the fact that it would violate WTO’s General Agreement on Tariffs and Trade, which requires “non-discriminatory treatment” between domestic and imported products.

The European Union may have devised a way to impose such a levy in its proposed carbon border adjustment mechanism, which equalizes fees through an emissions trading system that uses “carbon leakage” as a gauge.

“Carbon leakage” refers to companies that move production to countries with less stringent environmental policies.

The Cassidy–Graham proposal doesn’t include domestic fees “so it would be difficult for the United States to argue the FPF would comply with WTO rules,” CSIS concludes.

But those same rules allow “bad actors” to thrive while impoverishing the compliant, Cassidy said, so slapping a “fee on certain products from a country like China roughly equal to their avoided cost of not complying with environmental regulations” levels the field.

“As the President speaks about tariffs,” he told Burgum, “your position will be making sure our industry is competitive” and a FPF would help do that.

Burgum was non-committal.

Trump’s trade principle “is reciprocity,” he said.

“If you have access to our markets and we don’t have access to yours, or if you’re using unfair practices, if you’re dumping here, if you’re not doing reclamation, using child labor ... to lower costs, that’s exactly the kind of place he is publicly spoken about, that he would want to have reciprocity with tariffs” to penalize “bad actors,” he said.