As currently drafted, the PROTECT USA Act, introduced on March 12, 2025, may have the unintended impact of creating a significant tension between compliance with U.S. and EU laws by U.S. and non-U.S. companies.
A newly-created category of entities covered by the Act - "entities integral to the national interests of the United States" - captures a broad swath of U.S. and non-U.S. companies that do business with the U.S. Government, and U.S. companies and their worldwide subsidiariesin extraction and manufacturing industries. Covered companies would be prohibited from complying with non-U.S. environmental and social-related due diligence laws. This prohibition includes the EU Corporate Sustainability Due Diligence Directive and any "predecessor" laws imposed by an EU member state, presumably such as the French Duty of Vigilance Law and the German Supply Chain Act.
Watch this space for further analysis of this proposed legislation.
WASHINGTON—United States Senator Bill Hagerty (R-TN), a member of the Senate Banking Committee, today introduced the Prevent Regulatory Overreach from Turning Essential Companies into Targets (PROTECT USA) Act of 2025, legislation to shield U.S. companies from the European Union's (EU) harmful extraterritorial regulations. (...) "American companies should be governed by U.S. laws, not unaccountable lawmakers in foreign capitals," said Senator Hagerty. "The European Union's ideologically motivated regulatory overreach is an affront to U.S. sovereignty. I will use every tool at my disposal to block it."
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