Trade policy is often cast as a solution to the free‐riding problem in international climate agreements. This paper examines the extent to which trade policy can deliver on this promise. We incorporate global supply chains of carbon and climate externalities into a multi‐country, multi‐industry general equilibrium trade model. By deriving theoretical formulas for optimal carbon and border taxes, we quantify the maximum efficacy of two trade policy solutions to the free‐riding problem. Adding opt