SCOOP: Chairman French Hill on how the European Union’s "CSDD undermines U.S. jurisdictional sovereignty"

Rep. French Hill explains why the EU’s Corporate Sustainability Reporting Directive (CSRD) and Corporate Sustainability Due Diligence Directive (CSDDD) would devastate America's economy.

House Financial Services Committee Chairman French Hill (R., Ark.) is urging the Trump administration to push back against sweeping European Union (EU) “sustainability” mandates that he warns would impose foreign regulatory control over American businesses.

Hill called for an indefinite pause to the EU’s Corporate Sustainability Reporting Directive (CSRD) and Corporate Sustainability Due Diligence Directive (CSDDD) in a letter to U.S. Trade Representative Jamieson Greer, arguing that they function as non-tariff trade barriers that threaten U.S. competitiveness and sovereignty.

Hill said the directives’ expansive reporting demands, requiring companies to compile more than 1,200 environmental, climate, and social data points, would drive up compliance costs for thousands of American firms, including private companies with only limited European operations. Industry leaders share those concerns.

The National Association of Manufacturers’ (NAM) Charles Crain previously told the Reporter the rules “would impose new compliance costs throughout U.S. supply chains,” potentially totaling up to $1 trillion.

Hill also warned that the directives would erase long-standing distinctions in U.S. corporate governance law by subjecting both public and private companies to foreign disclosure
mandates.

“Beyond economic risks, CSDDD undermines U.S. jurisdictional sovereignty,” Hill told the Reporter. “CSDDD disregards the fundamental distinction between public and private companies, forcing all companies meeting the €450 million turnover threshold to disclose information beyond what is relevant to U.S. investors.”

The rules’ due-diligence mandate, which requires companies to police their global supply chains for alleged environmental and human-rights violations, poses even deeper challenges, Hill said.

Hill argues that the directive effectively turns American companies into global enforcement arms for EU policy, imposing liability for actions far beyond their control. He warned that the sweeping scope of the mandate, reaching upstream and downstream across entire value chains, creates “open-ended legal exposure” that could force companies to withdraw from European markets rather than risk foreign litigation.

Republicans point to a recent case in which the United Auto Workers sued Mercedes-Benz under German law over operations in Alabama as evidence of growing foreign interference. As Sen. Tom Cotton (R., Ark.) warned, “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.”

Recent developments in Europe, including raising company-size thresholds and delaying reporting deadlines, reflect growing recognition that the directives harm EU competitiveness. But Hill argues that partial revisions are insufficient and is urging the Trump administration to halt the measures entirely.

Hill says the United States must draw a firm line against foreign overreach. He urged the Trump administration to act, warning that the EU’s mandates “discourage transatlantic economic cooperation and invite extraterritorial threats to U.S. sovereignty,” and called for them to be “indefinitely paused.”