The United States is urging the European Union to further ease its corporate environmental rules, citing commitments Brussels made with Washington during last year’s trade negotiations.
U.S. Ambassador to the EU Andrew Puzder said Friday that the bloc should honor commitments reached during the talks with President Donald Trump in Turnberry, Scotland, in July 2025 to address non-tariff burdens on American businesses.
“Now it’s time for the EU to deliver,” Puzder wrote on X.
A U.S. government statement accompanying Puzder’s post acknowledged that Brussels had made “some positive reforms,” but said those changes had failed to fully address Washington’s concerns.
“The United States will take any actions necessary to address unreasonable burdens on U.S. commerce absent a solution that addresses these concerns,” it stated.
The dispute centers on two legislative pillars of the so-called European Green Deal: the Corporate Sustainability Due Diligence Directive, or CSDDD; and the Corporate Sustainability Reporting Directive, known as the CSRD.
The CSDDD requires large companies to identify and address adverse human rights and environmental impacts associated with their operations and business relationships. The CSRD, meanwhile, requires covered companies to disclose sustainability-related information about their environmental and social impacts.
Both can apply to companies headquartered outside the EU if they conduct enough business within the bloc.
EU Reform Missed US Expectations
Under the U.S.–EU trade framework announced last year, Brussels committed to undertake efforts to ensure that the two directives “do not pose undue restrictions on transatlantic trade.”
It also agreed to work to address Washington’s concerns about applying CSDDD requirements to companies based in non-EU countries.
Brussels has since scaled back both directives as part of its campaign to cut red tape, which began before the Turnberry talks.
Changes agreed by EU lawmakers in December 2025 and given final approval by the Council in February narrowed the CSDDD to companies with more than 5,000 employees and more than 1.5 billion euros in annual net turnover. For non-EU companies, coverage is triggered by a net turnover of over 1.5 billion euros within the EU.
The scope of CSRD was also narrowed. The revised rules apply where a non-EU parent firm generates more than 450 million euros in annual EU turnover and has a qualifying local subsidiary or branch generating more than 200 million euros.
The changes reduced the number of companies subject to the sustainability rules compared with their original scope. But they stopped short of exempting U.S. companies altogether.
Washington argues that the remaining requirements could still reach deep into the operations and supply chains of American companies.
“The directives’ extraterritorial reach and costly and onerous supply chain due diligence obligations will adversely impact the ability of U.S. businesses to compete on a level playing field in the EU market,” Puzder said in Friday’s statement.
The National Association of Manufacturers, which represents 14,000 companies across numerous industries, argues that those obligations could extend beyond the large companies directly covered by the law and affect smaller, privately held and non-EU businesses throughout their supply chains.
American manufacturers already spend over $350 billion annually complying with domestic regulations, the group said.
Brussels Pushes Back
The European Commission, however, signaled that it is unlikely to allow Turnberry talks to dictate the bloc’s regulatory framework.
A Commission spokesperson told The Epoch Times that Brussels had made “considerable efforts” to explain its rules and had emphasized its willingness to work with the United States to increase trade where possible.
“We have been very clear and consistent on the fact that neither our rules framework nor our regulatory autonomy are up for negotiation,” the spokesperson said in a statement.
The sustainability rules are part of a wider dispute over non-tariff barriers following last year’s U.S.–EU trade agreement.
In an op-ed last week, Puzder criticized the EU’s Carbon Border Adjustment Mechanism, calling the carbon tax a “tariff by another name” that raises costs for U.S. exporters.
Separately, a White House report released this week identified the EU among more than 40 economies it said were involved in a “global shadow transshipment network” used to reroute China-linked goods to avoid U.S. tariffs.
Under the report’s central scenario of $75 billion in annual illegal transshipment, the White House estimated that the practice could be associated with $19 billion to $26 billion in annual federal revenue losses.
