The United States has opened a review of the EU’s Carbon Border Adjustment Mechanism (CBAM) to establish whether it harms American trade and whether planned extensions would create unfair barriers for US companies. The Office of the US Trade Representative (USTR) set out the inquiry in an official document published on 8 October.
Washington will look at how the levy affects costs, regulatory burdens, access to the EU market, direct and indirect exports and overall trade with the bloc. US companies have until 9 November to send in their views, which the USTR says will inform its continued dealings with the EU on CBAM. The administration argues that the mechanism creates financial liabilities for American firms, raising the prospect of fresh trade friction with Brussels.
CBAM took effect in January 2026 and covers imports of aluminium, cement, fertilisers, hydrogen, and iron and steel. Its purpose is to put EU producers and foreign rivals on an equal footing and to stop carbon-heavy production moving to countries with weaker climate rules. Importers must monitor and report the emissions generated in making the goods they bring in. Soon after the launch, several EU countries asked for temporary exemptions for fertilisers, warning that higher prices could endanger food security. Russia has also challenged the levy, and the World Trade Organisation has agreed to set up a panel to examine its legality.
Brussels is now negotiating an extension to more products, including washing machines and car parts, and tightening rules to stop companies avoiding the tax. Member states and the European Parliament both consider the Commission’s proposal too narrow but disagree on what to add. Belgian Green MEP Sarah Matthieu wants clean technology such as solar panels and heat pumps included, while critics warn wider coverage would raise prices for businesses and consumers.
The two sides also differ on emissions calculations. MEPs want default carbon values applied automatically to high-risk goods and origins, while governments would let firms use their own data if the evidence is strong enough. Defaults are estimated from country-specific, sectoral and energy data, and Washington objects to what it calls a “punitive markup” on them. Ireland, which holds the Council presidency, wants a deal at a meeting on 20 October. The European Commission did not respond to Euronews’ request for comment before the article was published.
