WASHINGTON, D.C. – April 9, 2025 — U.S. Senators Bill Cassidy and Lindsey Graham have introduced an updated version of the Foreign Pollution Fee Act, a bill designed to impose a carbon tax on imports from countries with high-emission production methods, including China.
The proposed legislation aims to “level the playing field” for American manufacturers, who are required to adhere to strict environmental standards, unlike many foreign competitors.
“It’s long past time that the polluters of the world, like China and others, pay a price for their policies,” Senator Graham said. “This bill rewards American businesses that are doing the right thing.”
According to Senator Cassidy, foreign producers can reduce costs by up to 20% by avoiding environmental regulations, a practice he says has cost American jobs.
The bill is structured to:
-
Combat unfair trade practices, particularly China’s exploitation of global trade rules
-
Revitalize U.S. manufacturing by curbing dirty imports
-
Strengthen global supply chain resilience through trade diversification
-
Encourage cleaner production in international markets
-
Deepen trade ties with countries that share U.S. economic and environmental values
Originally proposed in 2023, the Foreign Pollution Fee Act has since been revised based on public consultation and industry feedback. The 2025 version narrows the scope of the tax to focus only on imports with higher carbon intensity than U.S. equivalents, removing the blanket 15% base rate proposed in earlier drafts.
According to Shuting Pomerleau, Director of Energy and Environmental Policy at the American Action Forum, the updated legislation would apply to six key industrial sectors:
-
Aluminum
-
Cement
-
Iron and Steel
-
Fertilizers
-
Glass
-
Hydrogen
A base tariff of 15% would be applied, with up to 40% added depending on the product's carbon intensity relative to U.S. standards.
The bill has already gained support from major domestic industry groups. The American Iron and Steel Institute (AISI) and the Steel Manufacturers Association (SMA) previously backed the 2023 proposal, calling it an important step toward protecting U.S. jobs and rewarding cleaner domestic production.
The legislation comes amid rising bipartisan concerns over climate policy, economic competitiveness, and the outsourcing of emissions through trade.
VietnamSteel by Hoa Sen Group
