What if the EU's carbon border tax took full effect?
A full-scale EU CBAM reprices carbon-intensive imports (steel, aluminum, cement, fertilizer) and is mildly risk-off for global trade, but the equity transmission is diffuse rather than a single sharp channel. No tariff-war analogue fits cleanly; it rhymes more with a slow regulatory cost-push than the Apr-2025 tariff gaps the dataset cites. Skeptic's note: CBAM is phased and carve-out-heavy, so the macro hit is gradual — the real trades are relative (EU low-carbon producers vs. exposed EM exporters), not an index-level risk-off.
Every number ships with its receipt — the odds, the range, the precedents, and a public grade at Reality Check. The statistical machinery that produces it is proprietary.
The butterfly cascade
How this trigger trickles across markets, left → right — the root shock, its first‑order moves, then the ripple effects. Drag any node; tap a market for its real price history.
Resolution timeline — how this probability is moving
Our model's odds (electric blue) over time vs the market's (Polymarket, amber), from the past toward the 1–3 years horizon. Each dot is a real macro event that nudged the probability — green pushed it up, red pushed it down. Tap a dot for the source. Loading the probability audit trail…
What it would mean
If this plays out, it is a mixed shock. The EU activates a full-scale carbon border tax (CBAM), repricing trade flows. The trigger decomposes into signed root‑shocks — Trade tension ▲ — which propagate through our causal graph to the markets below.