Key Republican lawmakers are pressing the European Union to abandon new environmental and human rights regulations they contend will cost U.S. companies billions of dollars annually. In a letter sent Thursday to the EU’s U.S. ambassador, Energy and Commerce Chair Brett Guthrie (R-Ky.), Financial Services Chair French Hill (R-Ark.), and Judiciary Chair Jim Jordan (R-Ohio) specifically targeted the EU’s Corporate Sustainability Due Diligence Directive (CSDDD).
The lawmakers described the CSDDD’s compliance requirements as “onerous and extraterritorial,” alleging they are designed to intentionally disadvantage American businesses through “invasive checks on a company’s supply chains.”
A study by the conservative think tank Hudson Institute, cited in the letter, estimates that the CSDDD could result in initial compliance costs ranging from $637 billion to $1.093 trillion for U.S. firms. These figures are comparable to the combined current annual expenditures of U.S. companies on environmental and financial regulations. The study further projects recurring annual costs for U.S. businesses between $57 million and $8 billion, potentially escalating to $6 billion to $43 billion when implicit costs are factored in.
“The EU’s CSDDD is yet another example in a concerning pattern of anti-competitive and anti-American business regulations,” Guthrie stated. He added that while a strong Europe benefits the Western world, EU regulators appear to favor “heavy-handed government intervention” over free markets and innovation, a strategy he believes has hindered the European economy and is now being extended beyond its borders.
The congressional leaders are requesting the EU remove the CSDDD regulations for non-EU businesses and indicated they are considering legislative actions to aid U.S. companies affected by these requirements. They warned that the costs and burdens of CSDDD compliance could compel American companies to significantly reduce or divest their European operations.
In October 2025, several advocacy groups, including the National Association of Manufacturers and the U.S. Chamber of Commerce, had already alerted Trump administration officials to the potential consequences of stricter EU environmental regulations. In a joint letter, these groups cautioned that American businesses might be forced to make difficult decisions regarding EU investments and exposure to penalties for non-compliance. They further projected that such a scenario could lead to slowed economic growth, supply chain disruptions, and a deterioration of transatlantic commerce and relations, adversely impacting businesses of all sizes and their local suppliers.