EU pushes back as US revives trade pressure on bloc

The European Union responded to renewed trade pressure from the United States on Friday, as Washington alleged the bloc was aiding Chinese circumvention of U.S. tariffs and urged it to relax stringent green rules on businesses. U.S. Ambassador to the EU Andrew Puzder called on the EU to align essential provisions of two landmark laws on environmental and human rights supply chain standards with the EU-U.S. trade deal from last year.

Puzder posted on X, "Now it's time for the EU to deliver," alongside a U.S. government document outlining numerous concerns with the regulations. The U.S. pledged to take any necessary actions to alleviate unreasonable burdens on U.S. commerce if no satisfactory solution is found. European Commission spokesperson Arianna Podesta responded to Puzder's message, stating 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 the EU's framework and regulatory autonomy are not up for negotiation. The Corporate Sustainability Due Diligence Directive (CSDDD) and the Corporate Sustainability Reporting Directive (CSRD) require large companies to address adverse human rights and environmental impacts of their supply chains worldwide and provide information on climate impact, emissions, and mitigation efforts.

The U.S. document argued that the extraterritorial reach and costly obligations of these directives would disadvantage U.S. businesses in competing in the EU market. The EU has already reduced the scope of both laws under business pressure, delaying implementation and exempting smaller firms, but the U.S. document claimed this was insufficient.

Puzder's remarks followed his criticism of the EU's carbon border tax, which he considered a "tariff in substance," despite its climate policy label. Separately, the EU was listed alongside other trading partners in a White House report on Thursday, highlighting risks of illegal transshipment from China, where goods pass through third countries to evade substantial levies imposed by President Trump.

The report also targeted Mexico, Canada, and Japan, promising to utilize artificial intelligence to detect illegal practices in the future. The EU shared the U.S. goal of addressing customs fraud, according to the spokesperson, who noted that Brussels is engaging with Washington to understand the report's potential implications for the EU, while acknowledging the document's assessment that the EU's transshipment risk is embedded within broad legitimate trade flows.