How Do The Trump Tariffs Affect Carbon Emissions?
This paper examines the impact of the Trump administration’s tariffs on global carbon emissions using a global computable general equilibrium framework. I decompose the effects into scale, composition, and technique channels, and find that emissions fall overall, not simply due to reduced trade. Scale effects are minimal, and composition effects—such as cleaner U.S. production displacing more carbon-intensive output abroad—are modest. Instead, technique effects dominate: the tariffs indirectly reinforce existing climate policies by increasing the renewable share of power generation and encouraging substitution away from fossil fuels. These results highlight how trade policy can interact with climate policy in unexpected ways, sometimes accelerating the transition to cleaner production.