Border adjustments at the domestic rate — the only revenue-relevant layer
Domestic externality pricing only works if imports face the same price. Without border adjustment, a priced harm becomes a unilateral disadvantage that pushes production offshore without reducing the underlying harm — known as carbon leakage in the climate literature. Layer A is the fix, and it is the one layer the United States enacts unilaterally, on Day 1, without waiting on any ally.
The border adjustment equalizes the price of the harm at the line — at the domestic rate, never above it. Imports from a jurisdiction with a comparable domestic carbon price cross with no adjustment. Imports from a jurisdiction with no carbon price (or a lower one) face an adjustment equal to the gap to the US domestic carbon price — which starts at $80/ton and escalates by statute toward, and past, the $150/ton Social Cost of Carbon. The SCC is the justification for the domestic trajectory, not the border benchmark: charging imports more than domestic producers pay would exceed national treatment and would have to be separately justified. As the domestic price climbs, the border adjustment climbs with it. The same architecture applies to methane once the MARL is in force.
For these two instruments, WTO compatibility is by design. GATT Article III:2 (national treatment) permits extending domestic indirect taxes to imports at the domestic rate. Article XX(g) (conservation of exhaustible natural resources) and XX(b) (human, animal, plant life or health) provide the affirmative defenses. The EU's Carbon Border Adjustment Mechanism (in force 2026) is the working precedent that the architecture is implementable. This compliance claim is deliberately scoped to the carbon and methane adjustments — the negotiated compact of Layer B stands on a different legal footing, stated plainly below.
Fiscal treatment. Layer A receipts are already scored inside the carbon and methane border adjustments — they are carbon-fee revenue, not new Alliance revenue. The Alliance Incentive as an engine is scored at $0 net: no revenue from the governance-score tariff gradient enters any fiscal projection, and no Alliance line offsets cost commitments in any legislative package.
The compact — tariff preferences, market access, treaty alignment
Current US trade policy stitches together ad hoc tariffs — Section 232 national security, Section 301 IP, anti-dumping, countervailing duties — into tariff chaos. The compact proposes replacing the patchwork with a single coherent rule: trade terms scale with governance quality. The tier table below is the recommendation the United States brings to the table — terms to be negotiated with the allied bloc, whose combined GDP is the leverage that makes renegotiation realistic. Negotiated outcomes are never forecast, and negotiated revenue is never pre-scored.
Strategic supply chains — semiconductors, critical minerals, pharmaceuticals, energy — are structured to prefer Tier 1 and Tier 2 sources. Tier upgrade unlocks procurement and defense industrial-base contracting. The incentive runs through every channel where the US extends preferential access. (Immigration is not one of those channels — the Employer Parity Surcharge is origin-neutral, scored on the worker's quantifiable credentials, not the passport.)
The legal posture, stated plainly. Unlike the border adjustments of Layer A, the governance-tier tariff is a country-based criterion, and country-based tariff differentiation departs from the WTO's most-favored-nation baseline. The Accord does not pretend otherwise. The tier architecture, the labor-standards adjustment, and the withholding schedule are negotiated terms — existing bilateral tax treaties and bound tariff schedules are renegotiated, not unilaterally overridden. In the interim, national-security instruments cover the adversary tiers, and the Accord expects — and prices in — disputes and retaliation from nations assigned to the lower tiers. A deliberate, negotiated departure is a position; a compliance claim that doesn't survive a trade lawyer's first read is not.
The governance score — six domains, every nation, public methodology
The doctrine underneath the compact is the Cooperative Accountability and Partnership Index: governance quality can be scored, published, and appealed — and any nation can climb a tier by climbing the score. 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 rubric is statutory; the appeals process is published; the time-on-tier required for upgrade is documented in advance. The policy is the rubric, not the discretion — not retaliatory escalation, not a list of bad actors that changes by administration.
The Global Scorecard publishes the current tier assignment and the six-domain breakdown for every country the United States has substantive trade or diplomatic relations with. Public methodology, public scores, public appeals — and a clear path between tiers based on the published rubric. The scorecard is doctrine, not a revenue instrument: no fiscal projection books a dollar from it.