U.S. Reps. French Hill (R-AR), Ann Wagner (R-MO), Andy Barr (R-KY), Tim Scott (R-SC), and Bill Hagerty (R-TN) voiced their concerns over the competitiveness of U.S. businesses should they be required to adhere to the European Union’s Corporate Sustainability Due Diligence Directives (CSDDD).
In a letter to U.S. Treasury Secretary Scott Messent, and Director of the National Economic Council Kevin Hassett, the Congress members said the CSDDD poses risks to U.S. companies that threaten their competitiveness.
“The Directive’s extraterritorial reach extends beyond the European Union, implicating U.S. businesses in ways that threaten economic productivity, corporate governance principles, and jurisdictional sovereignty,” the law makers wrote. “Recently, President (Donald) Trump, in a speech before the World Economic Forum in Davos, Switzerland, identified “non-economic” trade barriers that impede market access to Europe. CSDDD exemplifies such a barrier, imposing extensive regulatory burdens on U.S. companies operating globally. Given the substantial ramifications of this Directive, we strongly urge you to engage with European counterparts to vocalize direct opposition and encourage an indefinite pause on its implementation.”
The Congress members urged the Trump administration to support European calls to pause CSDDD, assert the directive’s extraterritorial application is detrimental to global productivity, protect American companies by having them removed from the directive, and clarify that U.S. companies are not bound by net zero transition plans like the ones imposed on EU firms.
“According to a recent estimate, at least 300 U.S. companies listed in the S&P 1500 will be directly affected by CSDDD, though this number is likely higher due to the Directive’s broad application to companies generating revenue from Europe,” the letter said. “Beyond economic risks, CSDDD undermines U.S. jurisdictional sovereignty. U.S. corporate governance law distinguishes between publicly and privately held companies, with regulatory obligations calibrated accordingly. However, CSDDD disregards this distinction, requiring all companies meeting the €450 million turnover threshold to disclose information beyond what is relevant to U.S. investors. The U.S. Securities and Exchange Commission (SEC) recently indicated its intent to unwind similar disclosure requirements, further highlighting the misalignment of CSDDD with U.S. legal principles.”