PRESS RELEASE: Free-Market Coalition Urges Trump Administration, Congress to Counter Economically Ruinous European Union Law

The European Union’s recently enacted Corporate Sustainability Due Diligence Directive (CSDDD) would ‘impose foreign ideological mandates on U.S. businesses, and erode national sovereignty’

This ‘egregious regulatory overstep’ would directly govern the activities of large U.S. companies doing significant business in the European Union—such as Amazon, Apple, Ford, and Microsoft—as well as most of their business partners, including small and medium-sized businesses that do not operate in the European Union

‘American policymakers must take decisive action to protect U.S. businesses from the destructive influence of foreign ESG mandates that serve political interests rather than economic well-being’

ARLINGTON HEIGHTS, IL (April 2, 2025) — The Heartland Institute and a coalition of more than two dozen other free-market advocacy organizations have sent a letter to key Trump administration officials, congressional leadership, and the chairmen and ranking members of relevant congressional committees urging action to counter a radical new European Union law that would “impose foreign ideological mandates on U.S. businesses and erode national sovereignty.”

The EU’s Corporate Sustainability Due Diligence Directive (CSDDD) imposes sweeping ESG obligations on large companies worldwide, regardless of whether they are based in the European Union. The law would degrade U.S. sovereignty and free markets, undermine U.S. economic interests, drive up costs for American consumers, and impose crippling penalties on non-compliant American businesses.

From the letter: “Under the directive, covered businesses must adhere to a set of ESG-focused compliance measures, many of which are aligned with political and ideological objectives that have not been approved by U.S. lawmakers. … Not only will many large U.S. businesses be forced under the CSDDD to adjust their internal operations to comply with these mandates, but they will also be required to ensure that their suppliers and business partners—no matter where they are based or the size of their operations—adhere to many of the same restrictive ESG standards.”

To speak to a Heartland Institute expert on this topic or one of the signatories listed below, please contact Director of Communications Jim Lakely at [email protected] and 312/377-4000 or (cell) 312/731-9364.

The Heartland Institute on March 31 released a new Policy Study titled “CSDDD: The European Union’s Corporate Sustainability Due Diligence Directive Is a Direct Threat to U.S. Sovereignty, Free Markets, and Individual Liberty.”

This study, which provides a comprehensive analysis of the law and its implications for the United States, calls the CSDDD “one of the most economically restrictive and nakedly authoritarian laws in the history of western democratic civilization.” Study authors Jack McPherrin and Justin Haskins conclude in an accompanying press release that the CSDDD “is the greatest threat to America’s sovereignty since the fall of the Soviet Union.”

The letter was sent this week to Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick, U.S. Trade Representative Jamieson Greer, and National Economic Council Director Kevin Hassett. The letter was also sent to House Speaker Mike Johnson (R-LA); House Minority Leader Hakeem Jeffries (D-NY); Senate Majority Leader John Thune (R-SD); Senate Minority Leader Chuck Schumer (D-NY); House Ways and Means Committee Chairman Jason Smith (R-MO) and Ranking Member Richard Neal (D-MA); and Senate Finance Committee Chairman Mike Crapo (R-ID) and Ranking Member Ron Wyden (D-OR).

Signatories to the letter—authored by The Heartland Institute, a free market think tank founded in 1984—include:

Americans for Tax Reform; the Competitive Enterprise Institute; 60 Plus Association; CFACT; the American Consumer Institute; the American Energy Institute; Eagle Forum; Heritage Action for America; Tradition, Family, Property, Inc.; Pro-Family Legislative Network, Roughrider Policy Center; Western Energy Alliance; and Our Republic.

The Heartland Institute is a national nonprofit organization founded in 1984 and headquartered in Arlington Heights, Illinois. Its mission is to discover, develop, and promote free-market solutions to social and economic problems. For more information, visit our website or call 312/377-4000.

Read the whole letter below and click here for a version of the letter with references and signatures.

We, the undersigned organizations, write to express our deep concerns regarding the European Union’s (EU) recently enacted Corporate Sustainability Due Diligence Directive (CSDDD).  This radical law threatens to undermine American economic interests, impose foreign ideological mandates on U.S. businesses, and erode national sovereignty.

If allowed to proceed unchecked, this directive will exert significant influence over the U.S. economy. The CSDDD is designed to impose sweeping ESG obligations on large companies worldwide, regardless of whether they are based in the European Union. Under the directive, covered businesses must adhere to a set of ESG-focused compliance measures, many of which are aligned with political and ideological objectives that have not been approved by U.S. lawmakers.

The CSDDD directly applies to companies headquartered in the European Union with a minimum of 1,000 employees and global revenue exceeding €450 million (about $475 million). However, it also captures non-EU businesses, including those from the United States, if they generate €450 million or more in revenue from the EU market.

Not only will many large U.S. businesses be forced under the CSDDD to adjust their internal operations to comply with these mandates, but they will also be required to ensure that their suppliers and business partners—no matter where they are based or the size of their operations—adhere to many of the same restrictive ESG standards.

The CSDDD’s myriad climate and energy provisions would effectively destroy many conventional energy industries and require an economy-wide transition to more expensive, less reliable forms of energy, such as wind and solar. It directly binds U.S. companies to the objectives of the Paris Climate Agreement and other climate-focused international agreements. This part of the CSDDD alone would drive up costs for nearly all U.S. products and services.

Moreover, the CSDDD strengthens labor union power and requires adherence to various binding agreements from the European Union and United Nations, which will further encroach upon the ability of U.S. businesses to operate independently. It also mandates that covered companies comply with vague and sweeping social justice requirements.

The directive includes many other stipulations that expand beyond traditional ESG goals. For instance, the CSDDD contains a provision requiring companies to regulate and restrict information deemed to be “disinformation,” opening the door for severe censorship.

Failure to adhere to these burdensome, authoritarian mandates will result in crippling penalties, including fines of up to 5 percent of a company’s net worldwide turnover. Even more troubling, the law allows activist organizations and private individuals to sue companies for alleged violations, creating a legal minefield that could financially devastate businesses of all sizes.

Many of America’s most prominent companies—including Amazon, Apple, Cargill, Google, Ford, McDonald’s, Meta, Microsoft, and Sysco Foods—will be directly affected by the CSDDD, along with hundreds of other large U.S. businesses. Yet, as noted earlier, the directive will not only apply to large multinational companies—the CSDDD forces directly covered companies to enforce the same ESG mandates on nearly all their business partners and suppliers.

As a result, thousands of small and medium-sized American businesses will be forced to comply with CSDDD standards as well, regardless of whether they do business in the European Union or how much revenue they generate. This will affect industries across all sectors, including agriculture, energy development, logistics, manufacturing, and many others.

It is imperative that the United States push back against this egregious regulatory overstep. The attempt to enforce European ESG mandates on U.S. companies is a direct assault on America’s national sovereignty, as is the attempt to force U.S. companies to abide by dozens of international agreements the United States has not signed or ratified.

American policymakers must take decisive action to protect U.S. businesses from the destructive influence of foreign ESG mandates that serve political interests rather than economic well-being.

We urge Congress and the Trump administration to take immediate steps to counter the CSDDD’s implementation. This includes, if necessary, imposing retaliatory trade policies that punish EU nations for eroding America’s sovereignty, freedoms, and prosperity. Congress and the Trump administration have the responsibility to safeguard American industry and citizens from coercive ESG mandates that will stifle innovation, increase costs, and erode liberties.

We, the undersigned organizations, stand united in opposition to the Corporate Sustainability Due Diligence Directive and call on you to act swiftly to protect U.S. businesses, American values, and national sovereignty from this unacceptable encroachment.

Sincerely,

James Taylor
President
The Heartland Institute