US tariffs were framed as industrial policy, but they may end up as Europe’s best public relations tool for climate taxes.
The Trump administration didn’t set out to make climate trade initiatives such as the European Union’s carbon border adjustment mechanism more politically salable. Yet here we are. As the EU’s CBAM begins a phase-in on Jan. 1, 2026, US tariffs arguably gave other economies the green light to rewrite trade rules under more progressive branding.
CBAM is a climate measure that puts a carbon price on imports and effectively charges foreign producers of goods if their home country lacks equivalent environmental standards. It aims to shift pressure from the market to the regulators.
When one major economy normalizes erecting trade barriers, others gain justification to embark on their own—whether for digital policy, retaliation, or in this case climate. CBAM may be dressed in green, but it walks and talks like a tariff. And thanks to a year of US industrial protectionism, perhaps Europe won’t need to apologize for shaking up the trade rulebook.
The irony is apparent. US exporters now risk being penalized under CBAM because the US lacks a carbon price. Any argument that this is an undue trade barrier would ring hollow coming from a country that spent this year perfecting its own tariff toolkit.
Call it protectionist parity—the moment when one country’s tariffs stop being an exception and start becoming functional permission for everyone else to follow. In trying to protect domestic industry with blunt tariffs, the US may have handed Europe the political freedom and consumer appetite to do the same, only with more polish and a climate rationale.
—Andrew Leahey
Welcome to the Week in Insights for Bloomberg Tax’s latest analysis and news commentary. This week, experts analyzed the Trump administration’s order on marijuana rescheduling, R&D tax credits, and more.
The Exchange —It’s where great ideas on tax and accounting intersect.
Insights
UK Joins the ‘Median Club’ With Its Transfer Pricing Adjustments
The UK’s new transfer pricing strategy offers tax directors a choice—play it safe and take a median adjustment or have robust documentation ready to defend why you won’t.
Trump Order on Marijuana Rescheduling Doesn’t Cancel State Laws
President Donald Trump’s executive order to expedite the reclassification of marijuana indicates a decreasing stigma against cannabis and offers the possibility of future tax savings.
R&D Tax Credits Got Simpler at Federal Level. Not in the States
Wide-ranging state R&D tax credit rules will require taxpayers to classify states correctly, track amortization schedules where they persist, and coordinate research narratives.
2025 Highlights
Read the Top 5 Federal Tax Insights of 2025
With the overwhelming amount of tax news in 2025—and the seeming endless opinions about it—we were curious to see what Insights resonated with our readers the most over the past year. The most read US-based tax insights were as varied as the news itself, touching on pop culture, tax code changes, and upheaval in the federal government. The authors of these Insights also ran the gamut, from Big Law attorneys to CEOs and even a former IRS commissioner.
Read the Top 5 AI in Tax and Accounting Insights of 2025
Using AI is no longer an option for tax and accounting professionals, who must use the many tools available in order to stay current—and especially to keep evolving with the latest trends.
Read the Top 5 Transfer Pricing Tax Journal Articles of 2025
This is Bloomberg Tax’s roundup of the top five TMIJ articles on transfer pricing.
Read the Top 5 High-Net-Worth, Estate Planning Articles of 2025
Read Bloomberg Tax’s roundup of the top five Tax Management Memorandum articles of 2025 about high-net-worth clients and estate planning.
Columnist Corner
The IRS has a rare opportunity to make its voluntary disclosure program—which aims to help tax evaders become compliant—fair and functional, Andrew Leahey says in his latest Technically Speaking column.
The program has become punitive and high risk to the point it undermines itself, Andrew says. While the proposed changes are a good start, “the program may remain a chained gate disguised as an open door” without more flexible payment terms and clarity over digital assets. Read More
News Roundup
Tax Guidance on Capital Breaks, CAMT Rollbacks on Tap for 2026
Enacting the GOP’s massive tax law is a priority for the IRS going into 2026 as the agency contends with its first full filing season after the Trump administration’s massive workforce cuts.
Student Loan Forgiveness Poses Looming Tax Dilemma for States
States face a tough choice in the year ahead: pile onto US tax bills looming for thousands of student loan borrowers whose debts are forgiven under an income-driven repayment plan, or forgo much-needed revenue.
First Batch of Tax Forms for Crypto Transactions Sow Confusion
Cryptocurrency investors will head into a new and confusing tax season next year as they receive the first-ever batch of reporting statements disclosing information from their digital asset transactions and navigate potential differences in federal and state rules.
UN Tax Treaty Talks Enter Big Year as Business Watches Closely
Businesses will keep a close eye on negotiations at the United Nations over global tax rules, with first drafts and their economic impact studies planned to be released next year.
Tax Management International Journal
Nigeria Reforms Tax Laws for 2026, Rewrites Rules for MNEs
The impact of Nigeria’s new tax laws that become effective January 2026 on multinational enterprises that are deriving income from Nigeria is examined.
Spain Unlocks WHT Refunds for Nonresidents in Loss Positions
Spain’s non-discrimination jurisprudence opens new tax refund possibilities for international taxpayers operating through group structures, though also introduces substantial documentation and verification complexity.
Saudi Arabia Advances Tokenized Real Estate Taxation Rules
As Saudi Arabia explores digital transformation and blockchain adoption, the tokenization of real estate introduces significant tax and regulatory uncertainty.
Tax Management Memorandum
IRS Modernizes Collection: What’s Next for Tax Practitioners
The IRS’s heightened focus on enhancing collection efforts through AI and technological advancements, coupled with recent court ruling, signals a shift in tax collection practices.
Career Moves
Greenberg Traurig Adds Squire Patton Boggs Tax Lawyer in Houston
Taylor Klavan joined Greenberg Traurig as a shareholder in its public finance and infrastructure practice in Houston, the firm announced Monday.
Baker McKenzie Promotes Tax Attorneys in Los Angeles, Miami
Dmitrii Gabrielov and Linnie Benezech were promoted within Baker McKenzie’s tax practice group, the firm announced Monday.
Tax Workout Group Promotes Ramone-Shane Johnson to Principal
Ramon-Shane Johnson was promoted to principal at law firm Tax Workout Group, the firm announced Wendesday.
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