EXCLUSIVE: Sen. Tom Cotton, NAM, and API slam European climate law: "disastrous economic model"
Lawmakers and industry are concerned about how a European Union regulation could decimate American jobs. Here's why.
The European Union is moving ahead with its Corporate Sustainability Due Diligence Directive (CSDDD), a far-reaching climate and supply chain mandate that could drive up costs for Americans by making energy bills more expensive.
The Washington Reporter previously covered the risks of the directive in an interview with Secretary of Interior Doug Burgum and in an editorial on the downside of its overreach.
Many Republicans in Congress have described the CSDDD as a scheme to drive up costs for Americans. House Financial Services Committee Chairman French Hill (R., Ark.), along with Reps. Ann Wagner (R., Mo.) and Andy Barr (R., Ky.) and Sens. Tim Scott (R., S.C.) and Bill Hagerty (R., Tenn.), sent a letter to the Treasury Department and National Economic Council warning that the directive threatens U.S. competitiveness and could impose European standards on American companies.
Sen. Tom Cotton (R., Ark.) told the Reporter that “the EU is trying to export their disastrous economic model to Arkansas by forcing American companies to comply with supply chain and climate rules that their representatives have firmly rejected. I have deep concerns about this infringement on American sovereignty.”
Reuters recently reported that the EU was considering weakening the law, but the National Association of Manufacturers (NAM) told the Reporter that the EU will still move forward with the CSDDD climate law. Denmark in particular is one of the countries pushing CSDDD, and Poland is one of the countries that wants to scale it back. The policy is also dividing countries internally, as seen in Germany, where Chancellor Friedrich Merz is opposed to CSDDD and socialists are in support of CSDDD.
NAM’s Managing Vice President of Policy, Charles Crain, told the Reporter that “manufacturers have warned about the potential impact of the CSDDD and other European mandates for several years.”
This EU regulation, he added, “would impose new compliance costs throughout U.S. supply chains, which would increase the prices of many products sold in America. A recent study estimates that U.S. businesses could face up to $1 trillion in new costs. The CSDDD will entangle small manufacturers in red tape to document if they meet EU environmental and labor laws. Ultimately, American consumers will pay the costs of this EU mandate.”
While on the surface, the regulation would primarily affect bigger companies that sell to Europe, it could also indirectly harm smaller companies that comprise essential parts of supply chains.
“We applaud the Trump administration for persuading the EU to reduce the number of companies subject to the CSDDD, but we still expect this EU directive will lead to crushing cost increases for the thousands of manufacturers in supply chains for U.S. companies that sell products to Europe,” Crain said.
As early as 2023, Crain’s organization “urged House lawmakers to oppose the EU’s efforts to impose costly due diligence and disclosure requirements on U.S. businesses,” he noted.
Despite the policy’s issues, Crain said that “most Americans are not yet aware of the significant threat to the U.S. economy posed by the CSDDD.” His organization, he said, “is raising awareness by running newsletter ads, partnering with other trade organizations, and sharing our concerns with the Trump administration. We appreciate the efforts by the U.S. Trade Representative and our diplomats to exempt U.S. manufacturers from the CSDDD, and we encourage them to keep up the pressure.”
As 2025 comes to a close, Crain said that heading into next year, his organization “encourages Congress to support the administration’s efforts to persuade the EU to repeal the CSDDD or exempt U.S. companies. We hope that European officials will reverse course given that this directive will threaten trade, jeopardize energy security, and harm competitiveness on both sides of the Atlantic.”
The American Petroleum Institute (API) has also noted that “overreaching EU rules like CS3D risk slowing growth on both sides of the Atlantic. Burdensome mandates could disrupt access to reliable, affordable energy and essential resources. Strong economies need smart policy, not bureaucratic overreach.”