Trump is starting a tarrif war that will lead to a carbon tax. What there not to love about all this.
A tariff war could potentially lead to the implementation of a carbon tax as a retaliatory measure. For instance, Canada has expressed interest in using a carbon border adjustment as a retaliatory tactic against the U.S. in response to tariffs, which essentially functions as a carbon tax on imported goods.
The dangers of a carbon tax include economic damage and reduced incomes, as even a revenue-neutral carbon tax exacerbates pre-existing distortions in the tax system, adding a drag on the economy that exceeds the benefits from recycling the revenue.
Additionally, implementing a carbon tax that significantly reduces emissions would require a price far higher than what the public would accept, making it economically inefficient.
Furthermore, the cost of living increases due to a carbon tax could disproportionately affect low-income households, as they generally spend a larger percentage of their income on emission-intensive goods. Lastly, there is uncertainty about the effectiveness of a carbon tax in reducing emissions without a worldwide effort.
Oh, and look who can't wait for a carbon tax....