Washington warns European Union that further action could follow if Brussels does not address burdens imposed on American businesses by CSDDD, CSRD
Despite recent reforms, EU sustainability laws continue to raise serious concerns about regulatory overreach, U.S. sovereignty, and transatlantic trade
SCHAUMBURG, IL (August 27, 2026): The Trump administration is continuing to press the European Union to limit the impact of its corporate sustainability regulations on American businesses, with U.S. officials reportedly warning Brussels that further action could follow if outstanding concerns are not resolved.
The United States is right to do so. The European Union’s Corporate Sustainability Due Diligence Directive (CSDDD) and Corporate Sustainability Reporting Directive (CSRD) impose environmental, human-rights, and reporting requirements on large companies, including qualifying businesses headquartered outside the European Union. Although European policymakers have partially narrowed and delayed the CSDDD since its original enactment, the directive still seeks to apply EU-created regulatory obligations to covered American companies and their international business activities.
In March 2025, The Heartland Institute published a comprehensive Policy Study, “CSDDD: The European Union’s Corporate Sustainability Due Diligence Directive Is a Direct Threat to U.S. Sovereignty, Free Markets, and Individual Liberty,” examining the directive’s extraterritorial structure and potential consequences for American businesses and policymaking. Subsequent reforms have reduced the number of companies directly covered by the law and removed several of its original requirements, but they have not eliminated the underlying concern that European regulators are imposing substantive policy obligations on U.S. businesses outside the European Union.
The United States and European Union agreed in their 2025 transatlantic trade framework that Brussels would work to ensure CSDDD and CSRD do not impose undue restrictions on transatlantic trade and would address U.S. concerns about applying CSDDD requirements to companies based in non-EU countries. Continued negotiations should focus on establishing clear protections for American businesses and ensuring that domestic environmental, labor, and corporate policy remain accountable to American lawmakers and voters.
The following statements from experts at The Heartland Institute – a free-market think tank – may be used for attribution. For more comments, refer to the contact information below. To book a Heartland guest on your program, please contact Director of Communications Jim Lakely at [email protected] and 312/377-4000 or (cell) 312/731-9364.
“This is regulatory imperialism, not cooperation. The EU should stop using access to its market as a weapon to export its political agenda, and the UK and United States should make it very clear that foreign businesses will not accept Brussels dictating how they operate around the world. This is wild overreach.”
Lois Perry
Director
Heartland United Kingdom/Europe
[email protected]
“Though the European Union deserves credit for scaling back some of the most burdensome elements of the CSDDD, the fundamental jurisdictional problem has not disappeared. European policymakers should not be able to use access to the EU market as a mechanism for imposing broad regulatory requirements on American companies and their operations around the world.
“The United States has a legitimate interest in defending its businesses against foreign regulatory mandates that extend beyond reasonable conditions for operating within another country’s market. Washington should continue working with its European partners toward rules that preserve robust transatlantic commerce while respecting the regulatory authority and democratic institutions of both sides.”
Jack McPherrin
Senior Policy Analyst, Research Fellow
The Heartland Institute
[email protected]
The Heartland Institute is a national nonprofit organization founded in 1984 and headquartered in Arlington Heights, Illinois. Its mission is to discover, develop, and promote free-market solutions to social and economic problems. For more information, visit our website or call 312/377-4000.
Lois Perry is the Director of Heartland UK/Europe. She is a former leader of the UK Independence Party (UKIP) and the founder of Car26, an organization opposed to Great Britain’s headlong direction of Net Zero by 2030. Ms. Perry joined The Heartland Institute as the Director of Heartland UK/Europe in 2024.
Jack McPherrin is a Senior Policy Analyst and Research Fellow for The Heartland Institute.
