Based on the differential game theory, this paper constructs differential game model of two countries under welfare maximization, and analyzes the impact of China's environmental cost internalization through environmental taxes (fees), environmental tariffs, and international cooperation on welfare and environmental effects. The Hamilton-Jacobi-Bellman equation is used to obtain the optimal environmental tax and environmental tariff levels of the static linear Markov perfect Nash equilibrium. The study found that, at a given level of pollution, global welfare is the minimum under the environmental cost internalization policy of unilateral environmental taxes (fees), followed by the environmental cost internalization policy of environmental tariffs, and the environmental cost internalization policy of national cooperation is the maximum. In terms of environmental effects, the environmental cost internalization policy of international cooperation is the best, followed by the environmental cost internalization policy of environmental tariffs, and the environmental cost internalization policy of unilateral environmental taxes (fees) is the worst. This is mainly due to the cross-border environmental externality and "free-riding effects" of unilateral environmental taxes (fees), which benefit countries that implement relatively loose environmental standards. At the same time, strict environmental cost internalization policies will be conducive to the improvement of the international competitiveness of enterprises in countries with climate easing policies, that is, there will be a "rent transfer effect". Environmental tariffs and international cooperation environmental cost internalization policies can partially or completely eliminate the impact of these effects.