The EU’s legislative proposal for the Carbon Border Adjustment Mechanism (CBAM) was passed in 2021, signaling the imminent carbon tariff dispute between emerging economies and developed countries such as those in Europe and the United States. The decomposition of global input-output data reveals that China stands as the largest emitter of carbon emissions embodied in exports, accounting for 25.94% of total global trade-embodied carbon emissions. Such substantial carbon emissions make China vulnerable to the impact of carbon tariffs by Europe and the United States. This paper employs a multi-regional input-output model and a multi-country, multi-sector general equilibrium model to simulate the counterfactual effects of carbon tariffs imposed by Europe and the United States on China’s industrial development. The results indicate that with a carbon price of $60 per ton, imports from China to the European Union and the United States would incur an additional average tax of 1.77% to 1.78%. At this juncture, the simultaneous imposition of carbon tariffs by Europe and the United States would lead to a 0.14% reduction in China’s social welfare, a 0.40% decrease in total output, and a 2.03% decline in total exports, with exports to the EU and the US dropping by 8.04% and 7.98%, respectively. At the industry level, exports of the chemical and chemical products, basic metals, computers, electronic, and optical equipment, electrical equipment, and machinery equipment would decrease by 5.03%, 6.13%, 5.46%, 12.31%, and 2.79%, respectively. China should proactively advance the green and low-carbon transformation of relevant industries, such as computer, electronic products, and equipment manufacturing, to prepare for future global carbon tariff competition.