Trump’s return to the White House seals U.S. exit from Paris Agreement amid business and environmental debate

Lost in the shuffle of the myriad executive orders issued by President Trump soon after his return to the White House was one stating that the United States, again, has exited the Paris Agreement.

As a refresher, of sorts, the Paris Agreement by the United Nations Framework Convention on Climate Change (UNFCC) requires each of the 195 participating countries to strengthen the global response to the threat of climate change by keeping a global temperature rise this century well below 2 degrees Celsius above pre-industrial levels and to pursue efforts to limit the temperature increase even further to 1.5 degrees Celsius. It also aims to strengthen the ability of countries to deal with the impacts of climate change. To reach these ambitious goals, appropriate financial flows, a new technology framework and an enhanced capacity building framework will be put in place, thus supporting action by developing countries and the most vulnerable countries, in line with their own national objectives. The nonbinding agreement also provides for enhanced transparency of action and support through a more robust transparency framework.

During Trump’s first term, the U.S. exited the Paris Agreement in June 2017, a move, which, at the time, came with some pushback from business leaders. An April 2017 letter to the White House from 16 companies, including Apple, DuPont, General Mills, Google, Intel, and Walmart, among others, pleaded their case for why the U.S. should remain in the agreement.

“Climate change presents U.S. companies with both business risks and business opportunities,” the letter stated. “U.S. business interests are best served by a stable and practical framework facilitating an effective and balanced response. We believe the Paris Agreement provides such a framework.”

What’s more, reasons for the U.S. remaining in the Paris Agreement, cited in the letter, included: strengthening competitiveness and reducing the risk of competitive imbalance for U.S. companies; supporting sound investment with the Paris Agreement providing greater clarity on policy direction and enabling better long-term planning and investment; and creating jobs, markets and growth, among others.

The U.S. subsequently re-entered the Paris Agreement soon after Joe Biden was in the Oval Office, but that was short-lived, following the 2024 election, with Trump’s return. With its renewed exit, the U.S. is one of four nations not participating, with the others being Iran, Libya and Yemen.

The Executive Order issued by the White House, regarding the U.S. exiting the Paris Agreement, observed that in recent years, the U.S. has joined international agreements and initiatives that don’t reflect the country’s values, adding that these types of agreements steer American taxpayer dollars to countries that do not require or merit financial assistance in the interests of the American people.

“The United States Ambassador to the United Nations shall immediately submit formal written notification of the United States’ withdrawal from the Paris Agreement under the United Nations Framework Convention on Climate Change,” stated the Executive Order. “The United States Ambassador to the United Nations, in collaboration with the Secretary of State and Secretary of the Treasury, shall immediately cease or revoke any purported financial commitment made by the United States under the United Nations Framework Convention on Climate Change.”

The U.S. exiting the Paris Agreement follows a December initiative announced by former President Biden, with only weeks left in his term, that focused on reducing U.S. emissions by more than 61%-to 66% below 2005 levels by 2035. But that may have been wishful thinking, when taking into account that, efforts by the U.S. to reduce greenhouse gas emissions were stalling last year, with the New York Times reporting that emissions fell just 0.2% annually in 2024, based on estimates from the Rhodium Group.

Jason Mathers, senior manager, supply chain logistics, for the Environmental Defense Fund (EDF), said that even with the U.S. exiting the Paris Agreement, the big picture does not really change.

“There is still a long-term imperative to reduce climate emissions and a really critical near-term imperative to reduce local air pollution around logistics facilities,” he said. “Our destination has not changed, but the road to get there becomes harder. When you think about something like the Paris Agreement, it commits the U.S. to put forward solutions. And what really matters [for the supply chain], is what those solutions are right. The things more relevant to supply chain stakeholders are tax credits of programs in the inflation Reduction Act, and those in the EPA greenhouse gas emission targets and things along those lines.”

Mathers said that those credits represent hundreds of millions of dollars towards things like cleaning up ports and building charging infrastructure for heavy-duty vehicles, among others.

What happens on the logistics and supply chain sustainability front remains to be seen, but one thing that remains certain is the ongoing uncertainty. While the U.S. is, again, no longer part of the Paris Agreement, and whether or not you may agree or disagree with that decision, that does not diminish the importance of ongoing climate and sustainability efforts being put forward every day by industry stakeholders.