U.S. Upsets UN’s Planned Carbon Tax on Maritime Shipping
This administration will not surrender America’s sovereignty to unaccountable international bureaucrats.
The latest attempted U.N. power grab just got Trumped. The International Maritime Organization’s (IMO) first-of-its-kind plan to impose a global carbon tax on maritime shipping companies seemed like a cinch heading into last week’s extraordinary session — until it rammed full-steam into an uncharted American iceberg. Elections have consequences, and this administration will not surrender America’s sovereignty to unaccountable international bureaucrats.
On Friday, the IMO’s Marine Environment Protection Committee (MEPC) voted 57-49 to table the carbon tax regulation for a full 12 months, a dramatic reversal from the regulation’s 63-16 victory in a preliminary vote this April. What made the difference was resolute opposition from the Trump administration, which found a convenient ally in Saudi Arabia.
As IMO Secretary General Arsenio Dominguez, of Panama, concluded Friday’s session, he “looked like a deer in the headlights,” observed one delegate. “My plea to you is not to repeat the way we have negotiated this week,” Dominguez complained. “This was not the normal IMO meeting,” he added. “Be nice and kind to each other. It doesn’t cost much.”
The functionary’s choice of words was disastrously inaccurate. In this case, the cost of being too nice was both quantifiable and unacceptably high. The carbon tax aimed to penalize shipping companies who operated vessels that ran on the current industry standard, very low sulfur fuel oil (VLSFO). The steep tax was calculated to make VLSFO just as expensive as non-carbon-based fuels (such as green ammonia, which is currently two to four times as expensive).
Thus, the U.N. proposed to dramatically raise the cost of maritime fuel, a major cost input of all maritime shipping, which accounts for 90% of all international trade. The regulation would have raised the costs of all imported goods for Americans by as much as 10% — as much again as Trump’s “Liberation Day” tariffs.
In addition to the economic burden, approving such a regulation would also concede the principle that the U.N. may lay and collect taxes on private companies like any national government, a massive concession of sovereignty that would lead to any number of unforeseeable consequences in the future. “This is a bigger deal than I think anybody realizes,” U.S. Ambassador to the U.N. Mike Waltz said before the Friday vote.
As for being “nice and kind,” the IMO traditionally makes decisions by consensus, which is a nice way of saying that some entrenched powers make all the decisions, and everyone else is compelled to play along. The IMO rarely even has to call a vote on the rules it adopts.
Both national governments and the shipping industry itself had endorsed the regulation, which seems to be an attempt by European nations to standardize their own costly green energy policies for the world. Dominguez was apparently affronted by the Trump administration’s importation of adversarial politics to obstruct this sinister scheme.
“I’ve been in this industry for 30 years and I’ve never seen anything like it,” said one shipping executive. “You just don’t say NO to these guys. It’s unheard of.” For a similar precedent, one would have to reach back to 1984, when the IMO failed to adopt a draft of the International Convention on Liability and Compensation for Damage in Connection with the Carriage of Hazardous and Noxious Substances by Sea (HNS Convention). A revised draft did not reemerge for another 10 years, and in 2009 the convention has still not entered into effect. This suggests that stopping an IMO regulation is rare, but derailing it once can prevent it from being adopted anytime soon.
Indeed, the extraordinary usurpation of sovereignty conceived in the IMO scheme impelled delegates to extraordinary measures to defend the citizens of their own nations. Before the IMO meeting, three U.S. cabinet secretaries published a joint statement threatening retaliatory sanctions, tariffs, and other economic measures for any nation who voted for the maritime carbon tax. On Thursday, President Trump himself weighed in:
“I am outraged that the International Maritime Organization is voting in London this week to pass a global Carbon Tax. The United States will NOT stand for this Global Green New Scam Tax on Shipping, and will not adhere to it in any way, shape, or form. We will not tolerate increased prices on American Consumers OR, the creation of a Green New Scam Bureaucracy to spend YOUR money on their Green dreams. Stand with the United States, and vote NO in London tomorrow!”
“That Trump Truth Social post sent shockwaves through the building,” confessed one delegate at the IMO session in London.
Beyond these external threats, the United States and other nations with similar interests engaged in what one shipping publication, GCaptain, called “delay tactics and procedural sabotage.” For example, the U.S. proposed to change the IMO’s adoption process to require “explicit” adoption, so that each nation that was party to existing protocols would have to individually approve the amended regulations.
In these negotiations, the U.S. played an excellent “bad cop” to Saudi Arabia’s “good cop.” While America threatened tariffs and acted tough, Saudi Arabia promised sweetheart economic deals and offered compromises. The two-pronged strategy convinced China to change its vote, while Greece, Cyprus, Japan, and South Korea — who has supported the regulations in April — abstained.
Eventually, the IMO voted to table the measure, rather than vote it up or down. An up-or-down vote would have required a two-thirds majority to pass and, if unsuccessful, would have killed the regulation for good. Instead, the vote to table means that the regulation can return for another vote in 12 months’ time.
Singapore advanced the motion to table, and Saudi Arabia called it to a vote. The motion to table was a close affair, passing 57 to 49, with 21 countries abstaining. If only five nations flipped their votes, or nine nations who abstained had voted, the outcome would have been different.
GCaptain CEO John Konrad reported that the negotiations continued down to the wire. “I can’t share the details on how @michaelgwaltz & @SecRubio have, in just a few days, organized the greatest opposition to UN policy since the Cold War and blocked this UN Carbon Tax,” he wrote. “I can say it was a knife fight to the end.”
While the U.S. did not outright kill the carbon tax, even delaying the vote represented a major diplomatic accomplishment. More than that, it will also push back the earliest possible implementation of the regulation — even if it passes next October — to 2030, complicating the aggressive timeline for the world’s shipping fleet to reach “Net Zero” carbon emissions by 2050. This might send international bureaucrats back to the drawing board entirely.
Industry players have chosen to gripe about Trump saving their bacon, betraying an ideological commitment to climate change ideology. But one line from analysts at Jeffries’ investment bank concedes the real point. “If there is one benefit to the IMO’s stalled initiatives,” they admitted, “it is that shipping costs may be coming down.”
For American families, that is the whole goal — why isn’t it a goal for the IMO?
“This is another HUGE win for @POTUS,” declared U.S. Secretary of State Marco Rubio. “Thanks to his leadership, the United States prevented a massive UN tax hike on American consumers that would have funded progressive climate pet projects. Our country will continue to lead the way and put America FIRST.”
Even his opponents seem ready to grant that this victory is one Trump earned. “Absolutely none of the maritime experts I interviewed early this week thought the US could pull this off. Zero. Massive amounts of money, NGO influence, diplomatic threat and media manipulation were behind this,” summarized Konrad. “And yet Trump did it.”
Joshua Arnold is a senior writer at The Washington Stand.
