Border adjustment tax invites retaliation

I know of no decision on whether the Australian government will include a border-adjustment tax in it’s implementation of a carbon-emissions tax. There seem to be differences in the Gillard cabinet over this point. But the reported Chinese reaction to the EU’s airline tax is ominous.

“Mr Enders [Chief Executive of Airbus] told Ms Hedegaard [EU Climate Commissioner] in a joint May 24 letter with Virgin Atlantic chief executive, Steve Ridgway, chairman of the Association of European Airlines: “If the EU goes ahead with its plans, China has already . . . announced its intention to deploy countermeasures against European aviation.” Extract from FT.com

China has been expressing strong concerns about the protectionist impact of autonomous abatement measures since before the Copenhagen Kyoto conference.

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