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Republican Senator Bill Hagerty of Tennessee has introduced legislation aimed at protecting US businesses from European ESG (environmental, social, and governance) regulations. Hagerty argues that these foreign policies impose undue burdens on American companies, and his bill is designed to prevent their interference with US economic interests, Bloomberg reported.
Hagerty, a member of the Senate Banking Committee, has introduced legislation aimed at countering what he calls ‘damaging foreign overreach’. His proposal seeks to push back against regulations imposed beyond US borders that he believes unfairly impact American businesses.
‘American companies should be governed by US laws, not unaccountable lawmakers in foreign capitals. The European Union’s ideologically motivated regulatory overreach is an affront to US sovereignty’, Hagerty stated in the legislative proposal.
Tensions between the US and the European Union have escalated since Donald Trump’s re-election in November 2024, with ESG policies becoming a major point of contention. The Republican Party has long opposed ESG initiatives, criticising them as an overreach of progressive ideology and a threat to American businesses, even before Trump’s return to the White House.
Hagerty’s bill targets the EU’s Corporate Sustainability Due Diligence Directive (CSDDD), which mandates climate transition plans and holds large companies accountable for ESG violations. Facing broad opposition, including within Europe, the European Commission recently scaled back the directive, scrapping a civil liability clause for major businesses operating in the EU.
Kim Watts, a senior policy manager at the American Chamber of Commerce to the European Union – which represents major corporations like Ford, Exxon Mobil, and Amazon – criticised the EU’s regulatory approach in a recent interview. She argued that European authorities are overreaching by imposing policies that extend beyond their jurisdiction, creating unnecessary complications for international businesses.
Hagerty vowed to use ‘every tool’ at his disposal to stop the CSDDD, introducing the Prevent Regulatory Overreach from Turning Essential Companies into Targets (PROTECT USA) Act of 2025. His move follows warnings from US Commerce Secretary Howard Lutnick, who stated in January that he was open to deploying trade measures in response to the EU’s ESG regulations.
The European Commission stated that it has taken input from all stakeholders, including non-EU businesses, into account. According to the commission, the proposed revisions aim to reduce bureaucratic hurdles for companies both within and outside the EU.