US Raises Pressure on EU to 'Deliver' on Non-Tariff Trade Commitments

The United States is urging the European Union to relax its laws that hold large companies responsible for the environmental and social impacts of their global supply chains. Washington contends that these regulations unduly restrict EU-U.S. trade, contradicting pledges made during trade negotiations.

U.S. Ambassador to the EU Andrew Puzder emphasized on X that the bloc must honor commitments from July 2025 trade talks with then-President Donald Trump. He stated the EU agreed to ensure its Corporate Sustainability Due Diligence Directive and Corporate Sustainability Reporting Directive do not create undue obstacles for transatlantic commerce. Puzder warned that the extraterritorial aspects of these laws negatively affect American businesses and workers.

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Now it's time for the EU to deliver. Under the Framework Agreement, the EU committed 'to ensure' that its Corporate Sustainability Due Diligence Directive and Corporate Sustainability Reporting Directive 'do not pose undue restrictions on transatlantic trade'.

The EU directives require major companies operating within the bloc, including U.S. firms, to disclose their environmental and social impacts across supply chains. The U.S. is also pushing for changes to the EU's Carbon Border Adjustment Mechanism (CBAM), which imposes fees on imports based on their carbon emissions.

This renewed pressure comes as U.S. and EU officials focus on non-tariff barriers following tariff agreements from July 2025. Sources suggest joint statements on non-tariff issues are expected in the autumn. The EU has previously adjusted some policies, like its anti-deforestation and methane emissions rules, after facing pushback. However, sources indicate the bloc is not planning further concessions on these measures. Last year, the EU scaled back its corporate sustainability rules, limiting the scope of the CSDDD to larger companies and delaying its compliance deadline to mid-2029. The CSRD now applies only to firms with over 1,000 employees, down from the initial threshold of 250.

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Extraterritorial provisions harm American businesses and workers, but it is not just the US that will suffer.