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US warns EU it may act over ESG rules affecting US companies
The US letter cites the extraterritorial reach and compliance costs of EU ESG directives, warning they could prevent US firms from competing on a level playing field.
The US government says the Trump administration is prepared to take “any actions necessary” to address what it calls unreasonable burdens on American commerce if the European Union does not scale back its ESG regulations, according to a letter sent to the EU.
The comments, accompanied by a post on X from US Ambassador to the EU Andrew Puzder, warn of renewed tensions between the US and EU over the Corporate Sustainability Reporting Directive and the Corporate Sustainability Due Diligence Directive.
The letter says the directives are intended to apply to companies doing business in the EU regardless of where they are based, and it argues that even reforms made after pushback have not fully addressed US concerns due to the directives’ extraterritorial reach and cost.
While the EU is drawing up guidelines for compliance with the due diligence directive, the US also cautioned against using those guidelines to reintroduce requirements tied to climate transition plans, according to Insurance Journal.