Sen. Tim Scott, R-S.C., and Rep. French Hill, R-Ark., have sent a letter to U.S. Trade Representative Jamieson Greer urging the Trump administration to press the European Union to indefinitely pause two EU sustainability rules they argue function as sweeping non-tariff trade barriers for U.S. companies.
In the letter, Scott and Hill congratulated Greer and the administration on efforts to advance a "Framework on an Agreement on Reciprocal, Fair, and Balanced Trade" with the EU, saying they understand the EU has committed to ensuring its Corporate Sustainability Reporting Directive (CSRD) and Corporate Sustainability Due Diligence Directive (CSDDD) no longer "pose undue restrictions on transatlantic trade."
The lawmakers contend the CSRD’s "double materiality" standard forces companies to disclose information beyond traditional financial materiality, arguing it would impose significant compliance costs, citing estimates that roughly 3,000 U.S. companies could be required to report about 1,200 data points.
They also warn the rules would burden privately held U.S. firms, potentially requiring disclosures that could reveal sensitive business information to competitors.
"These requirements are unduly burdensome, if not impossible, to comply with," Scott and Hill wrote.
Scott and Hill argue the CSDDD would be similarly disruptive by requiring companies with sufficient EU business ties to identify, mitigate, and eliminate alleged human rights and environmental abuses across supply chains, requirements they call overly broad and difficult to meet.
They also highlight what they describe as heightened civil liability and litigation risks, warning U.S. firms could face lawsuits abroad that they say undermine U.S. sovereignty, pointing to a recent case involving the United Auto Workers suing Mercedes-Benz under German law over conduct at an Alabama facility that is legal under U.S. law.
The letter notes Republicans have repeatedly raised concerns about the directives in prior correspondence and cites former Treasury Secretary Janet Yellen’s past warning that the CSDDD’s extraterritorial reach could produce “unintended negative consequences” for U.S. firms.
Scott and Hill asked Greer to make an indefinite pause of the CSRD and CSDDD a priority in continued engagement with EU officials, arguing the measures could discourage transatlantic economic cooperation and expand foreign legal reach into U.S. business practices.
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