According to the report, when the carbon border tax is fully implemented in 2034, US exporters will face only 351 million euros in CBAM costs. This amount represents just 0.14% of transatlantic trade in goods. When expected price effects are taken into account, the net cost is projected to drop to 160 million euros, or 0.07%.
In April, the US Trade Representative had claimed that the implementation of CBAM in 2026 could cost American exports 4.7 billion dollars.
According to Sandbag’s modeling, if Washington establishes its own carbon pricing system, it might even profit under CBAM. The think tank predicts that even if the US sets its carbon price at half of the EU level, it could gain 16 million euros advantage compared to the current situation.
Meanwhile, the “additional flexibilities” granted under CBAM during the EU-US trade agreement signed in August are seen as a result of Washington’s opposition.
David Kleimann, a senior researcher at ODI Europe’s international economic development group, commented on the matter, saying, “The EU has maintained its stance on CBAM despite US opposition.” Kleimann emphasized that Europe must remain resolute, warning that conceding to the US would be like “pulling a thread that could unravel everything.”
Earlier this year, the EU agreed to simplify CBAM through the omnibus process. Under this regulation, 80% of importers are exempted, while more than 99% of embedded emissions remain covered. Additionally, a 50-ton “de minimis” threshold was introduced to exempt small-scale imports from CBAM.
New revisions to the CBAM regulations are expected by the end of 2025. The European Commission is also expected to expand the scope of the mechanism in early 2026 by including new sectors.
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