USTR Seeks Business Input on the EU Carbon Border Adjustment Mechanism
October 13, 2026 | Reading Time: 5 min
Insights | Publications | Alerts
USTR Seeks Business Input on the EU Carbon Border Adjustment Mechanism
By: Alan Yanovich, Kenneth J. Markowitz, Jan Walter, Cara Morrow, Stephen S. Kho, Sally Stewart Laing, Sarah B. W. Kirwin, Amanda T. Lee, Yujin Kim McNamara, Hannes Sigurgeirsson, John Hoffner
Key Points
The USTR is gathering feedback from stakeholders on the current and potential impacts of the EU’s CBAM on U.S. producers, workers, exports, and overall U.S.-EU trade. They are specifically interested in information regarding:
- Costs and regulatory burdens
- EU market access
- Competitive effects
- The potential extension of CBAM to additional downstream products
- Appropriate enforcement actions to address negative CBAM effects
This consultation provides U.S. businesses with an opportunity to share their unique concerns with the U.S. government as it considers its response to the EU.
Comments are due by November 9, 2026.
On October 8, 2026, the Office of the U.S. Trade Representative (USTR) published a notice in the Federal Register requesting public comments on the EU’s Carbon Border Adjustment Mechanism (CBAM) and its effects on U.S. companies and trade. This comes as the CBAM enters its second year of operation and the EU considers expanding it to include more downstream products.
What is CBAM?
The EU’s CBAM is a carbon-pricing mechanism for certain imported goods. It aims to apply a carbon cost to eligible imports, reflecting the cost imposed on EU producers under their Emissions Trading System (ETS). As previously discussed in our alert, EU Carbon Border Adjustment Mechanism: Financial Obligations Commence Amid Proposed Scope Expansion to Include New Downstream Products, CBAM transitioned from a reporting-only regime to one with financial implications in January 2026.
Currently, CBAM covers selected goods in six sectors:
- Iron and steel
- Aluminum
- Cement
- Fertilizers
- Electricity
- Hydrogen
Under the current regime, EU importers or their customs representatives must report the emissions embedded in covered imports and surrender CBAM certificates. A carbon price paid in the country of production can be deducted from the obligation.
While CBAM primarily affects EU importers, U.S. companies may also be directly impacted where their EU subsidiaries act as importers. Additionally, U.S. producers exporting covered goods or components may face indirect effects through EU customer requests for production and emissions data, third-party verification, and cost pass-through.