Tariffs aligned with governance

Current US trade policy stitches together ad hoc tariffs — Section 232 national security, Section 301 IP, anti-dumping, countervailing duties — into tariff chaos. The Alliance Incentive replaces the patchwork with a single coherent rule: tariff rate scales with governance quality. Democracies with functioning institutions get the preferential rate; authoritarian and adversarial nations face higher rates; and any nation can move tiers by improving governance against the published rubric. The architecture is named internally as the Cooperative Accountability and Partnership Index.

Domestic externality pricing only works if imports face the same price. Without border adjustment, every priced externality (carbon, methane, labor-standards, health-risk) becomes a unilateral disadvantage that pushes production offshore without reducing the underlying harm — known as carbon leakage in the climate literature, parallel patterns in every other priced harm.

The Alliance Incentive border adjustment equalizes the price of the harm at the line. Imports from a jurisdiction with a comparable domestic carbon price cross at the standard tariff. Imports from a jurisdiction with no carbon price (or a price below the internationally defensible Social Cost of Carbon, set at $150/ton and updated triennially by the National Statistics Board) face an additional border adjustment equal to the price gap. The same architecture applies to methane, labor standards, and the other priced externalities once their domestic instruments are in force.

WTO compatibility is by design. GATT Article III:2 (national treatment) permits extending domestic indirect taxes to imports. Article XX(g) (conservation of exhaustible natural resources) and XX(b) (human, animal, plant life or health) provide the affirmative defenses for environment- and health-based adjustments. The EU's Carbon Border Adjustment Mechanism (in force 2026) is the working precedent that the architecture is implementable. The Accord aligns to the same legal posture: adjust at the price gap, document the methodology publicly, exempt jurisdictions with comparable domestic pricing, and defend the measure as cost-equalization rather than protectionism.

Each domain is scored independently by a panel of 7–9 international judges (no more than two from any single world region). Olympic method: drop the highest and lowest within each domain; average the remainder. Judges examine patterns of evidence, not algorithmic formulas. Domain scores combine with equal weighting to produce the tier assignment.

The published rubric is the policy. The differential between Tier 1 and Tier 4 is large enough to matter — 90 to 110 percentage points of base tariff — and the rubric is specific enough that a government can read it and identify the reforms that would move the score. Independent judiciary, contested elections, press freedom, defense floor, carbon price, labor standards. The path between tiers is open in both directions: nations that improve climb; nations that erode descend. The architecture rewards the direction of travel, not just the current state.

Strategic supply chains — semiconductors, critical minerals, pharmaceuticals, energy — are structured to prefer Tier 1 and Tier 2 sources. Tier upgrade unlocks procurement, defense industrial-base contracting, and Parity Wedge immigration priority. The incentive runs through every channel where the US extends preferential access; the architecture is consistent across all of them.

What this is not. Not retaliatory escalation. Not Section-301 ad hoc. Not a list of bad actors that changes by administration. The rubric is statutory; the scoring panel is internationally constituted; the appeals process is published; the time-on-tier required for upgrade is documented in advance. The policy is the rubric, not the discretion.