The cost of imports from China, India and other countries could be increasing if those countries fail to limit their greenhouse gas (GHG) emissions.

The Obama administration just raised — in China — the specter that the U.S. is serious about imposing a carbon tariff on products from countries that fail to limit GHG emissions.

U.S. Commerce Secretary Gary Locke told the American Chamber of Commerce in Shanghai, China, that the U.S. should pay for the carbon content in all imported products and services, including those from China, which has so far refused to limit its GHG emissions.

Translation: Imports will cost more if American adopts the cap-and-trade program to limit GHG emissions. If China refuses to limit emissions, then the U.S. will slap on carbon tariffs. If China limits GHG releases, then prices will rise as Chinese companies absorb related regulatory costs.

One consolation: Carbon tariffs might help U.S. business compete with Chinese imports.

Locke also said it was critical for everyone to limit GHG emissions to avoid an environmental “catastrophe” that will hit all countries, including developing countries that are just starting to catch up with more industrialized nations. He also emphasized that Chinese factories should be retrofitted or constructed with modern pollution controls to limit GHG and other emissions.

However, the overall tone of Locke’s remarks was to underscore the potential of Chinese/American partnerships that can make environmental and economic goals work together.

Locke’s speech and podcasts of Locke’s comments are here.

Tags: American Chamber of Commerce, carbon tariff, China, GHG emissions