This paper sets a model with two countries: a domestic vertically integrated firm controls the exports of both input and output products and a foreign firm produces the final good specialized. The domestic firm exports its final product, which environmental pollution will emerge during the production process, and engage in Cournot competition in a foreign market. Domestic government uses the export policies to the intermediate and the final goods, and pollution tax on final products. We find that: (1) even if domestic vertically integrated firm has higher profit in the final goods market, the optimal trade policy for the final goods may not be export subsidies; (2) the optimal pollution tax might not be the Pigouvian tax in the case of free trade, which depends on the difference in profit margins from the export of the intermediate and final products, (3) trade liberalization in intermediate market will decrease the domestic pollution tax and maybe also decrease the exporting country's welfare.