Today, Senator Bill Cassidy (R-LA) and Lindsey Graham (R-SC) reintroduced the 2025 Foreign Pollution Fee Act (FPFA), which would levy tiered and escalating tariffs on selected imported goods base on their carbon emissions, with the intention to boost U.S. manufacturers’ competitiveness in low-carbon goods and raise tax revenue. In a new insight, Energy and Environmental Policy Director Shuting Pomerleau explains why the 2025 FPFA would likely raise significantly less revenue compared to the 2024 discussion draft and cause economic harm.

She concludes:

It remains to be seen what the future developments of the FPFA will be amid President Trump’s ongoing sweeping global tariffs and the pending reconciliation bill. Nonetheless, carbon tariffs will raise the price of imports, hurt U.S. manufacturers, and impede U.S. economic growth.

Read the analysis.