Amidst rising low-cost steel imports from Asia, especially China, Europe has initiated the Carbon Border Adjustment Mechanism (CBAM), and the US is fast-tracking similar legislation to curb carbon-intensive steel imports, safeguarding their domestic steel industries. This intertwines trade and environmental policies.

The steel industry supports a carbon border fee, aligning with the principle of exporting steel, not emissions. However, implementing fees on domestic production could divert funds meant for clean steel production. While steel production methods differ globally, both the US and EU are extending tariff negotiations but face challenges in reaching significant progress.

China's steel exports surged in 2023, highlighting the need for measures like US carbon import fees to partially limit imports and protect domestic steel industries, but challenges persist in regulating imports beyond China.