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US President Donald Trump has escalated pressure on the European Union to weaken its landmark Corporate Sustainability Due Diligence Directive (CSDDD).
During ongoing trade negotiations, President Trump has threatened to impose tariffs of up to 30% on EU goods if a deal is not reached by 1 August.
While not directly tied to EU climate and human rights laws, the dispute has been used by fossil fuel companies who oppose the EU’s efforts to move away from fossil fuels and cut emissions.
This move follows reported lobbying by US oil executives, including ExxonMobil, who oppose requirements to report on greenhouse gas emissions and human rights impacts.
The Trump administration’s aggressive stance adds to growing threats to the CSDDD, which was passed in 2024 after years of negotiation and advocacy.
The directive requires large companies operating in the EU to identify and address human rights abuses and environmental harm throughout their supply chains, setting an enforceable global standard.
The CSDDD represents a major step forward in holding companies accountable for the social and environmental impacts of their operations.
By requiring businesses to conduct due diligence beyond just direct suppliers, it aims to prevent abuses such as forced labour, child exploitation, and environmental destruction from being hidden deep within global supply chains.
The directive also includes obligations for companies to align their business models with the goals of the Paris Agreement on climate change, helping the EU lead in global efforts to reduce emissions.
Without the CSDDD, there is a risk that companies can avoid responsibility, exposing workers, communities, and ecosystems to harm.
The law also brings clarity and consistency to businesses, helping responsible companies compete fairly.
Despite these benefits, the CSDDD now faces serious internal threats from the European Commission’s Omnibus Simplification Package, proposed in early 2025.
Although it claims to simplify the law, the proposal would weaken the directive by:
• Raising thresholds to exclude many massive companies from having to comply.• Limiting due diligence to Tier 1 suppliers, ignoring deeper supply chain risks• Removing requirements to align with the Paris Agreement• Undermining access to justice by removing harmonised civil liability provisions
If adopted, these rollbacks would create loopholes, fragment enforcement, and allow serious abuses to continue.
The combined external pressure from the US and internal moves within the EU emphasises why strong laws like the CSDDD are crucial.
Businesses warn that regulatory uncertainty harms investment and supply chain stability.
Clear, consistent laws empower companies to proactively manage risks, build stakeholder trust, and avoid costly legal or reputational damage.
Due diligence laws protect people and the environment, but they also protect businesses.
This ensures a level playing field where responsible companies thrive and bad actors face consequences.
The coming months are critical for the future of the Corporate Sustainability Due Diligence Directive.
EU leaders must reject attempts to weaken this landmark law through the Omnibus Simplification Package and resist external pressures aimed at rolling back essential climate and human rights protections.
Strong, enforceable due diligence laws like the CSDDD are important to:
• Prevent human rights abuses and environmental harm hidden in complex global supply chains• Provide legal clarity and accountability for companies operating in the EU• Support sustainable economic growth that respects people and the planet• Ensure victims of corporate wrongdoing have access to justice and remedy
Weakening these protections risks reversing years of progress, exposing vulnerable workers, communities, and ecosystems to harm, and undermining the EU’s role as a global leader in sustainability.
Strong leadership is needed to safeguard the integrity of the CSDDD and build a future where business accountability is non-negotiable.
This includes resisting corporate lobbying efforts that seek to prioritise profit over transparency, justice, and sustainability.