The US is looking to a potential carbon pricing system for goods and services imported into the country as part of a wider carbon policy. The step is a key policy shift as it looks to counter Chinese industrial competition and reduce emissions.

John Podesta said the US would fight against “freeriding” by foreign producers of carbon-intensive industrial imports, in an interview with the UK Financial Times. “We’re not going to just give up our industrial base to people who are dumping carbon and freeriding on a system that doesn’t account for, and in fact, kind of subsidises the dumping of high carbon production cost into open markets,” he said.

The global trading system does not take embodied carbon in tradable goods into account properly, Mr Podesta said. As a result, a task force will collect in-depth data to ultimately help form policy.

“What we need is to move towards a global trading system that is going to push towards clean,” Podesta said. “The specific policy mechanism that we will adopt needs to fairly reflect the carbon that is embodied in the goods being produced.” While there was “no decision about what the specific policy mechanism looks like” yet, he said there was a “bipartisan conversation about how we tackle this question” taking place in the US with lawmakers from both parties having tabled proposals targeting carbon-intensive sectors in recent years.

China is also considering expanding its carbon permit pricing system while the EU is implementing its carbon border adjustment mechanism (CBAM).