China's pollution costs lives, warms the planet, and distorts trade. It also harms American jobs. Unless the damage caused by China's pollution is addressed, the debates on climate change and global trade will inevitably get sidetracked and deadlocked.

China's steel industry deserves particular scrutiny because it accounts for a disproportionate share of China's pollution and carbon emissions by steel producers worldwide. It is the beneficiary of massive energy subsidies (more than $27 billion since 2000), and, as we now know, enjoys a tremendous and unfair advantage through a virtually non-existent regulatory regime.

Having quadrupled production since 2000, China's steelmakers now account for more than one-third of global production, but their share of greenhouse gas emissions is more than the rest of the world combined. The carbon footprint of a ton of steel made in China is two to three times as large as a ton of steel made in America.

A new report that our organization, the Alliance for American Manufacturing, issued on Monday shows the wide gap between the U.S. and China in environmental regulation and enforcement. Chinese companies emit more than five times as much sulfur dioxide, three times as much nitrogen oxide, and 20 times as much particulate matter as U.S. steel producers on a per ton basis.

Little wonder that 750,000 premature deaths in China every year are caused by air pollution, or that one-fourth of the particulate matter over Los Angeles can be traced back to China.

American steelmakers comply with air and water pollution standards that are six times tighter than China's. They spend at least twice as much to operate and maintain pollution control equipment. So it's important for policymakers to recognize that it is essential to keep manufacturing in the U.S. in a cap-and-trade world.

While America must lead the way on climate change, we can't leave China out. China's products should face the same treatment as America's products under any cap-and-trade or tax regime. Otherwise, American jobs will leave, and as dirtier production ramps up in China, the climate problem will only grow worse. That's not a solution anyone can live with.