US lawmakers and industry groups are intensifying criticism of the European Union’s Corporate Sustainability Due Diligence Directive (CSDDD).
They are warning that the forthcoming climate and supply-chain rules could impose heavy compliance costs on US companies and raise prices for consumers.
Their concerns come as the EU continues to advance the directive, despite internal divisions among member states and pressure from Washington.
Senator Tom Cotton told the Washington Reporter yesterday that the EU was “trying to export their disastrous economic model … by forcing American companies to comply with supply-chain and climate rules that their representatives have firmly rejected”. He called the directive an infringement on US sovereignty.
Republican members of Congress have been leading the pushback. House Financial Services Committee Chairman French Hill, along with Representatives Ann Wagner and Andy Barr and Senators Tim Scott and Bill Hagerty, recently sent a letter to the US Treasury Department and the National Economic Council.
They argued the directive risks “imposing European standards on American firms”, undermining US competitiveness and effectively exporting EU climate and labour policies into the US market.
The National Association of Manufacturers (NAM) has also warned that the CSDDD could have wide-ranging effects across US supply chains.
NAM managing vice-president of policy Charles Crain told the Washington Reporter that the regulation “would impose new compliance costs throughout US supply chains”. He added that a recent study suggests US businesses could face up to $1 trillion (€860 billion) in additional expenses.
Crain said these costs would ultimately fall on US consumers through higher prices, including for energy.
The American Petroleum Institute echoed the concerns, stating: “Overreaching EU rules like CS3D risk slowing growth on both sides of the Atlantic” and could disrupt access to “reliable, affordable energy”.
Despite new efforts in the EU to cut back the worst excesses of the CSDDD, NAM remained negative.
The directive has been contentious within Europe as well, with right-leaning parties opposing the new regulations, fearing negative effects on business and industry.
Progressives, meanwhile, are in favour, supporting the original goals of corporate sustainability reporting and due diligence rules, wanting the EU to be a global standard-setter.
COMMENT: The European Parliament should be applauded for pausing the EU's corporate sustainability directive in a bid to ease transatlantic tensions and avert a potential trade clash with the US, @JamesRCopland and Charles Yockey write. https://t.co/lVH6yux07F
— Brussels Signal (@brusselssignal) April 4, 2025
Crain noted that NAM and other trade groups have been raising concerns since at least 2023 and are continuing efforts to inform US policymakers and the public.
He said the organisation is “partnering with other trade bodies, running newsletter ads, and working with the Trump administration” to secure exemptions for US firms or persuade the EU to reverse course.
“With the year ending, we encourage Congress to support the administration’s efforts to persuade the EU to repeal the CSDDD or exempt US companies,” Crain said, warning the directive “will threaten trade, jeopardise energy security, and harm competitiveness on both sides of the Atlantic” if implemented in its current form.
The CSDDD aims to require large companies operating in the EU to conduct due diligence on environmental, human-rights and labour standards across their global supply chains.
While the regulations formally apply only to firms above certain thresholds selling into the EU market, US officials and industry representatives argue the knock-on effects could hit thousands of smaller companies that supply larger exporters.
EU institutions are expected to continue negotiations on the directive into 2026. Once adopted and published, member states must transpose it by July 26, 2027, with the rules applying in stages from 2028 and fully in force by 26 July 2029.
Current efforts to simplify European “green” rules would be increasing uncertainty for companies rather than easing compliance, a new study from climate think-tank E3G suggests. https://t.co/XV4xTD7ybG
— Brussels Signal (@brusselssignal) October 9, 2025
