EU pushes back as US revives trade pressure on bloc

The European Union expressed resistance to increased trade pressure from the United States on Friday, as Washington accused the bloc of facilitating Chinese circumvention of US tariffs and pressed for reductions to its green business regulations. US Ambassador to the EU Andrew Puzder urged the EU to align provisions of two new landmark laws on environmental and human rights supply chain standards with the EU-US trade deal from the previous year.

He posted on X, "Now it's time for the EU to deliver," alongside a US government document outlining numerous concerns with the rules. The document warned that the United States would take any necessary actions to address unreasonable burdens on US commerce without a solution addressing these concerns.

Responding to Puzder's message, European Commission spokesperson Arianna Podesta stated that the EU continued to exchange on both tariff and non-tariff issues with the United States, describing the process as "constructive." However, she emphasized that "We have been very clear and consistent on the fact that neither our rules framework nor our regulatory autonomy are up for negotiation."

The Corporate Sustainability Due Diligence Directive (CSDDD) requires large companies to address adverse human rights and environmental impacts of their worldwide supply chains, while the Corporate Sustainability Reporting Directive (CSRD) demands they provide information on climate impact, emissions, and mitigation steps. The US document argued that the EU's extraterritorial reach and costly due diligence obligations would disadvantage US businesses in competing on an equal footing in the EU market.

Despite previous attempts to dial back the scope of both laws under business pressure, the US document claimed that was insufficient.

Puzder's comments came after he criticized the EU's carbon border tax (CBAM), labeling it a "tariff in substance, no matter the climate policy label." The EU was also listed among various trading partners identified in a White House report on Thursday as risks for illegal transshipment from China, where goods are routed through third countries to avoid paying levies imposed by President Donald Trump.

The report vowed to utilize artificial intelligence to detect illegal practices in the future. The EU shared the US objective of addressing customs fraud, according to the spokesperson, who noted that Brussels was engaging with Washington to understand the report's potential implications for the EU, acknowledging that the document found the EU transshipment risk to be embedded within broad legitimate trade flows.