EU carbon border adjustment on Asian imports

In late July 2026 the European Union’s Carbon Border Adjustment Mechanism (CBAM) became a focal point for industry and policymakers concerned about the influx of Chinese steel. EU lawmakers warned that the sector could lose up to €90 billion in added value by 2025, with thousands of jobs at risk, and highlighted upcoming CBAM‑driven tariff increases and quota reductions set to take effect on 1 July 2026.

A week later, the scope of CBAM was broadened beyond steel to include aluminium, cement, electricity, fertilisers, hydrogen and iron‑steel, applying from 2026 through 2034. A UNECE report noted that the measure could reshape trade flows from China and Central Asian exporters, forcing them to absorb carbon costs, lower emissions, or adopt domestic pricing. Analysts warned that the policy might strain EU‑China relations while also offering opportunities for cooperation on emissions verification.

Together, the snapshots track the EU’s escalation from sector‑specific steel concerns to a comprehensive carbon‑border regime that targets a wide range of Asian exports, signalling growing regulatory pressure on Chinese and other Asian manufacturers.