United States Senator Bill Hagerty (R-TN), a member of the Senate Banking Committee, has introduced the Prevent Regulatory Overreach from Turning Essential Companies into Targets (PROTECT USA) Act of 2025. The proposed legislation seeks to protect American businesses from what he describes as the European Union’s (EU) excessive extraterritorial regulations.
The move comes in response to the EU’s Corporate Sustainability Due Diligence Directive (CSDDD), adopted in May 2024, which enforces international sustainability conventions as binding legal requirements on foreign companies. The directive mandates U.S. firms to comply with EU-imposed environmental, social, and governance (ESG) standards, including stringent net-zero carbon targets—measures that surpass U.S. legal requirements. Companies failing to comply face heavy financial penalties, while smaller businesses are also affected as larger corporations are obliged to monitor their supply chains for ESG compliance.
“American companies should be governed by U.S. laws, not unaccountable lawmakers in foreign capitals,” Senator Hagerty stated. “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.”
The PROTECT USA Act aims to shield U.S. companies from such measures by preventing certain American entities from being forced to comply with foreign sustainability regulations. It also prohibits punitive actions against businesses that refuse to comply and grants affected firms the right to pursue legal action.
This latest legislative effort builds on Senator Hagerty’s longstanding opposition to the CSDDD. In September 2024, he and Representative Andy Barr (R-KY-06) urged the Biden-Harris Administration to push back against the directive. A month later, Hagerty co-authored a Wall Street Journal op-ed warning of the EU’s regulatory encroachment. More recently, he joined other lawmakers in petitioning top U.S. economic officials to challenge the directive’s impact on American businesses.
