EU pushes back as US revives trade pressure on bloc

The European Union responded with resistance to renewed trade pressure from the United States on Friday, as Washington accused the bloc of facilitating Chinese circumvention of U.S. tariffs and urged it to weaken its environmental and human rights supply chain standards. U.S. Ambassador to the EU Andrew Puzder called on the EU to align the provisions of two new landmark laws with the EU-U.S. trade deal signed last year.

The document warned that the United States would take any necessary actions to address unreasonable burdens on U.S. commerce absent a solution that tackles these concerns.

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 rules framework and regulatory autonomy are not up for negotiation. The Corporate Sustainability Due Diligence Directive (CSDDD) requires large companies to address adverse human rights and environmental impacts in their worldwide supply chains, while the Corporate Sustainability Reporting Directive (CSRD) demands they disclose information on their climate impact and emissions, along with steps to mitigate them.

The U.S. document argued that the extraterritorial reach and burdensome supply chain due diligence obligations of these directives would negatively impact U.S. businesses' ability to compete on a level playing field in the EU market. Despite previous EU adjustments to the laws' scope, pressure from businesses inside and outside the bloc, the U.S. document claimed that was not sufficient.

Puzder's comments followed his earlier criticism of the EU's carbon border tax (CBAM), which he labeled as a tariff in substance, despite its climate policy label.

Additionally, the EU was among dozens of trading partners identified in a White House report released on Thursday as potential risks for illegal transshipment from China, where goods are routed through third countries to evade tariffs imposed by President Donald Trump. The report pledged to utilize artificial intelligence to detect such practices in the future.

The EU shared the U.S. objective of combating customs fraud, according to Podesta, who noted that Brussels was engaging with Washington to better understand the report's potential implications for the EU. The document claimed that the EU's transshipment risk was embedded within broad legitimate trade flows.