Carbon Copies: Suspicious Patterns of Commercial and Industrial Policy Response by the Behemoths of World Trade

This briefing analyzes the 'echo' effect of climate-related industrial policies among the world's largest trading economies, finding that subsidies and import curbs in net-zero sectors frequently trigger reciprocal responses from other major jurisdictions within 6 to 24 months.

• Analysis of 3,209 subsidy awards and 151 import curbs implemented since 1 January 2017 by China, the EU-27, and the United States indicates that policy measures in net-zero sectors often trigger reciprocal responses from other jurisdictions within 6, 12, or 24 months.
• Regarding subsidy responses, the EU-27 reacts almost every time to tariff and subsidy moves from China and the US that favor local firms in net-zero sectors. China responds quickly to EU subsidies but more slowly to US actions, especially import curbs. The US has a lower likelihood of responding with subsidies, though the probability still equals or exceeds 60% over a two-year period.
• In terms of market access, Chinese industrial policy support triggers the most frequent import curb reactions from the US and the EU-27. Import curbs implemented by the US and EU-27 are more likely to be followed by further import curbs elsewhere than are subsidy measures from those same two jurisdictions.
• The tendency for trade policy decisions to 'echo' one another raises concerns about tit-for-tat responses and trade conflicts, particularly if measures are driven by fears that foreign actions undermine local competitiveness rather than by market failures.

APA

Evenett, S. J., & Martin, F. (2024). Carbon Copies: Suspicious Patterns of Commercial and Industrial Policy Response by the Behemoths of World Trade. Forum on Trade, Environment, & the SDGs. https://tessforum.org/latest/carbon-copies-suspicious-patterns-of-commercial-and-industrial-policy-response-by-the-behemoths-of-world-trade

Chicago

Evenett, Simon J., and Fernando Martin. Carbon Copies: Suspicious Patterns of Commercial and Industrial Policy Response by the Behemoths of World Trade. Forum on Trade, Environment, & the SDGs, 2024. https://tessforum.org/latest/carbon-copies-suspicious-patterns-of-commercial-and-industrial-policy-response-by-the-behemoths-of-world-trade.

Wikipedia

{{cite report |last1=Evenett |first1=Simon J. |last2=Martin |first2=Fernando |title=Carbon Copies: Suspicious Patterns of Commercial and Industrial Policy Response by the Behemoths of World Trade |publisher=Forum on Trade, Environment, & the SDGs |date=16 December 2024 |url=https://tessforum.org/latest/carbon-copies-suspicious-patterns-of-commercial-and-industrial-policy-response-by-the-behemoths-of-world-trade |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{evenett2024carbon, author = {Evenett, Simon J. and Martin, Fernando}, title = {{Carbon Copies: Suspicious Patterns of Commercial and Industrial Policy Response by the Behemoths of World Trade}}, institution = {Forum on Trade, Environment, \& the SDGs}, year = {2024}, month = dec, url = {https://tessforum.org/latest/carbon-copies-suspicious-patterns-of-commercial-and-industrial-policy-response-by-the-behemoths-of-world-trade}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }