CAPITO, COLLEAGUES SOUND ALARM ON EUROPEAN REGULATORY ENCROACHMENT
Press Release
Last week, U.S. Senator Shelley Moore Capito (R-W.Va.) sent a letter with 63 bicameral Republican colleagues—led by U.S. Senator Bill Hagerty (R-Tenn.) and U.S. Rep. Andy Barr (R-Ky.-06)—urging U.S. Department of Treasury Secretary Janet Yellen and senior Biden-Harris administration officials to stand up for U.S. economic interests by addressing regulatory encroachment from the European Union (EU).
In May 2024, the EU formally adopted its Corporate Sustainability Due Diligence Directive (CSDDD), which enshrines progressive social and climate policies into binding international law. Under this directive, many U.S. businesses will be forced to comply with European policies or face severe penalties. CSDDD’s implementation raises serious concerns about extraterritorial regulatory overreach, adverse impacts on supply chains, litigation risks, and unfeasible climate transition requirements.
“The CSDDD’s extraterritorial scope amounts to a serious breach of U.S. sovereignty and a direct threat to the global competitiveness of American companies,” the lawmakers wrote. “We are deeply concerned that the [Biden-Harris] Administration is surrendering its regulatory responsibilities to European officials, allowing them to dictate draconian social and climate policies to American companies.”
“The EU is attempting to mitigate the relative damage of its onerous regulatory framework by forcing Americans to bear the burden as well,” the lawmakers continued. “Any policies impacting U.S. businesses should be debated and determined by the elected representatives of the American people, not overseas bureaucrats advancing their own agendas.”
The letter concludes by urging Secretary Yellen and senior Biden-Harris administration officials to engage with their European counterparts to delay CSDDD’s implementation and repeal or substantially modify the directive. To date, there has been little evidence that the administration has an effective strategy to address the issue.
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