U.S. President Donald Trump has announced withdrawal from 2015 Paris climate agreement, risking trade sanctions and a carbon tax on U.S. imports, wreaking havoc in large American companies and potentially negatively affecting the U.S. standing in the world.

President Trump’s decision to withdraw from the Paris agreement, which was signed by nearly 200 countries in 2015, cuts America from almost all other nations on the planet and goes against many major U.S.-based companies. Trump, who has been a vocal skeptic of climate change and vowed to withdraw from the accord during his 2016 election campaign, made good on his yet another controversial presidential election promise.

Donald Trump Climate Agreement Climate
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Trump announced the milestone decision to withdraw the U.S. from the Paris agreement on Thursday addressing the White House Rose Garden. In what comes as one of the most controversial decisions by President Trump since assuming office, Trump said America would halt all implementations of non-binding elements of the Paris agreement “as of today,” arguing that exiting the climate change accord would save “2.7 million jobs” that would have otherwise been lost to other nations.

Saying that the Paris agreement “transfers jobs out of the U.S. and ships them to other countries,” President Trump called the climate change agreement an attempt of other countries to “gain an advantage over the United States.”

The only other countries that have never signed the Paris agreement are Nicaragua and Syria.

Trump withdrawing from Paris agreement could bring catastrophic climate change consequences

Arguing that the Paris agreement would make it “very hard” for the U.S. to “compete with the rest of the world,” President Trump lambasted the agreement for being an anti-U.S. accord. In what comes as a decision that that sets the world’s largest economy apart from the rest of the world, Trump lashed out at the Paris agreement for allowing China to “build hundreds of additional coal plants,” while not allowing America to do so. The U.S. President also criticized the 2015 accord for allowing India to “double their coal production” while the U.S. is “supposed to get rid of ours.”

“This agreement is less about the climate and more about other countries getting an advantage over the United States,” Trump declared.

The Paris agreement was signed by nearly 200 countries in Paris 2015 and has the goal to keep global warming beneath 2°C (3.6°F) by 2100. In order to achieve that, the nations that agreed on the accord would have to reduce carbon dioxide and other emissions from the burning of fossil fuels. Under the 2015 Paris agreement, the U.S. was supposed to slash its emissions by 26 to 28 percent from 2005 levels by 2025.

Trump, however, is open to beginning negotiations to possibly re-enter the Paris agreement or set up a new accord “on terms that are fair to the United States, its businesses, its workers, its people, its taxpayers.” Despite climate change experts saying the accord would save the planet from catastrophic sea level rises and more frequent extreme weather changes, Trump downplayed the importance of the Paris agreement saying that a “two-tenths [degrees Celsius] reduction in global temperature by the year 2100 – a tiny, tiny amount.”

Should US expect trade sanctions and taxes on imports after Trump’s withdrawal?

Despite President Trump not ruling out the possibility of re-negotiating the climate change agreement, the governments of Germany, Italy and France – the three largest economies in the European Union – rebuked the idea of any re-negotiations on the Paris agreement, according to Reuters.

Trump pulling out of the 2015 climate change accord places the U.S. into an uncertain position, as the country cannot technically withdraw from the accord until November 2019. In addition to the rules banning countries from formally pulling out of the agreement until three years after the agreement entered into force, countries also must give a year’s notice before they can withdraw from the Paris agreement.

So while U.S. formal withdrawal from the climate change agreement may not take effect until 2020 – something that would most likely create a 2020 presidential election debate issue – there is a shortcut way for the U.S. to pull out. If Trump also announces withdrawal from the 1992 parent U.N. Framework Convention on climate change, it could speed up the process and allow the U.S. to pull out of both within just a year, according to The Washington Post.

The U.S. pulling out of the Paris agreement could prompt other nations to impose retaliatory tariffs as well as countries imposing trade sanctions or a carbon tax on U.S. imports. While a study by NERA Consulting estimated that the Paris agreement could cost the U.S. economy “nearly $3 trillion over the next several decades,” some of the largest American companies and industries could potentially be impacted by the U.S. withdrawal for supporting the agreement. Many companies, including Apple and Microsoft, have advised Trump against pulling out of the Paris accord, with ExxonMobil, the oil giant whose former CEO Rex Tillerson is now Secretary of State, publicly lobbying the White House to uphold the accord.

US withdrawal could wreak havoc in businesses and various industries

The U.S. withdrawing from the Paris agreement also means that the country would most likely turn its back on the existing financial pledges it had committed for the agreement under President Barack Obama in November 2015. That means the U.S. would most likely not deliver the $2 billion of its $3 billion pledge to finance efforts to tackle climate change.

The U.S. withdrawal from the climate change agreement could potentially result in other nations following America’s suit and pulling out of the deal and potentially spoiling international climate efforts. It’s fair to say, however, that Trump’s withdrawal from the agreement will most likely have no immediate impact on climate change, as it would take years of international efforts to curb emissions and tackle what is often referred to as one of the most pressing global problems of our time.

The list of potential consequences of Trump withdrawing from the Paris agreement could, however, wreak havoc in major businesses as well as in renewable energy and other industries involved with reducing emissions. The U.S. pulling out of the climate change agreement could, in theory, slow down or even halt international efforts by deterring investments and hurting sales related to the climate strategy under the 2015 accord.

While Trump’s withdrawal could set precedent for other nations pulling out of the Paris agreement, a number of countries have already said they would remain committed to the accord, with China likely to become the driving force behind international climate efforts. Even India, which faces international pressure for being of the biggest polluters, has reaffirmed its commitment to the agreement.