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Civitas Outlook
Topic
Economic Dynamism
Published on
Mar 27, 2025
Contributors
Michael Toth
Photo by Guillaume Périgois on Unsplash,

Congress Must Shield US Companies from European Regulations

Contributors
Michael Toth
Michael Toth
Research Fellow
Michael Toth
Summary
Congress should exercise its constitutional powers over foreign commerce to guard American companies against overregulation by the European Union.
Summary
Congress should exercise its constitutional powers over foreign commerce to guard American companies against overregulation by the European Union.

The Trump administration’s tariffs and the ensuing debates have diverted attention from the fact that regulating international trade is the role of Congress. After all, tariffs are taxes, and it’s a bedrock principle of U.S. law that taxation requires legislation.

The Framers made this point clear when they granted Congress the power to impose “imposts” and “duties” — meaning tariffs — to regulate external commerce.

Fortunately, Congress is starting to exercise its constitutional powers over foreign commerce again. On March 12, Sen. Bill Hagerty (R-Tenn.) — a former U.S. ambassador to Japan — introduced a bill to shield U.S. companies from the European Union’s Corporate Sustainability Due Diligence Directive, a regulation dating back to July 2024 that forces U.S. companies to audit their entire supply chains and disclose wide-ranging environmental, social, and governance or ESG metrics that exceed the requirements of U.S. law.

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