Senate Republicans have introduced a bill to block U.S. companies from complying with the EU’s sustainability due diligence rules, escalating tensions over global ESG regulations.
March 12, 2025 – Senate Republicans have introduced the PROTECT USA Act, a bill aimed at shielding U.S. companies from complying with the EU’s Corporate Sustainability Due Diligence Directive (CSDDD), which mandates strict environmental and human rights due diligence across global supply chains.
A Pushback Against EU Sustainability Rules
Introduced by Senator Bill Hagerty, a member of the Senate Banking Committee, the proposed legislation seeks to:
- Prohibit U.S. companies in sectors such as agriculture, energy, mining, timber, and manufacturing from being forced to comply with foreign sustainability regulations.
- Block enforcement of any judgments against U.S. companies under such rules.
- Prevent adverse actions resulting from compliance with CSDDD.
“American companies should be governed by U.S. laws, not unaccountable lawmakers in foreign capitals,” said Senator Hagerty, calling the EU rules “ideologically motivated regulatory overreach.”
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Legislative and Political Context
The bill follows a Senate Banking Committee letter urging the Trump administration to oppose the CSDDD and push for an indefinite pause on its implementation. While the EU’s directive was formally adopted in May 2024, it faces delays and scope reductions, limiting due diligence requirements to direct business partners rather than full supply chains.
If passed, the PROTECT USA Act could set up a major transatlantic trade conflict, with global corporations caught between EU and U.S. regulatory frameworks on sustainability and corporate responsibility.
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