EU rejects US pressure on green business rules

The European Union pushed back on Friday after the United States renewed pressure over the bloc's green business rules and accused it of risks linked to Chinese tariff evasion.

US ambassador to the EU Andrew Puzder urged the bloc to “align” provisions of two environmental and human rights supply chain laws with the EU-US trade deal struck last year. A US government document posted with his message listed concerns and warned that Washington would take “any actions necessary” to address what it called unreasonable burdens on US commerce if no solution was found.

European Commission spokesperson Arianna Podesta said the EU was continuing constructive exchanges with the United States on tariff and non-tariff issues. But she said the bloc had been clear that “neither our rules framework nor our regulatory autonomy are up for negotiation.”

The Corporate Sustainability Due Diligence Directive requires large companies to address adverse human rights and environmental impacts in their supply chains worldwide. The Corporate Sustainability Reporting Directive requires companies to provide information on climate impact, emissions and steps to limit them.

The US document said the directives' reach and supply chain obligations would hurt US businesses' ability to compete in the EU market. The EU has already reduced the scope of both laws, delayed implementation and spared smaller firms, but the US document said those changes did not go far enough.

Puzder's comments came a day after he criticised the EU's carbon border tax, known as CBAM, calling it “a tariff in substance.” Separately, a White House report flagged the EU among dozens of trading partners as risks over alleged illegal transshipment from China, where goods are sent through third countries to avoid US tariffs.

Podesta said the EU shared the US goal of tackling customs fraud and was engaging with Washington to understand the report's possible implications for the bloc. She also noted that the report described the EU transshipment risk as “embedded within broad legitimate trade flows.”