Exxon Mobil's CEO implores Donald Trump to employ trade negotiations as a means to challenge stringent EU regulations described as "bone-breaking."
The EU-US trade deal, announced on July 27, 2025, is a non-binding agreement aimed at enhancing transatlantic trade and competitiveness for American companies. The deal focuses on tariff reductions, investment, and market access improvements, targeting a $750 billion increase in US energy exports to Europe by 2028 [2][3][5].
The agreement includes commitments to eliminate tariffs in various sectors and create meaningful quotas for US goods, boosting US exports and energy sales to Europe. Simultaneously, it addresses burdensome EU regulatory requirements for US companies, particularly small and medium enterprises, to improve their ability to compete in the EU market [2][5].
However, the trade agreement is political rather than legally binding, meaning further negotiations are expected to solidify its terms and implementation [3]. There remain EU considerations for possible retaliatory tariffs if negotiations falter [1].
Separately, the EU Corporate Sustainability Due Diligence Directive (CSDDD) is a separate regulatory framework intended to ensure corporate compliance with climate and human rights standards. For US companies operating or exporting to the EU, this means additional compliance costs and governance requirements but also alignment with rising global standards for climate and social responsibility, increasingly demanded by investors and consumers [4].
Compliance with the CSDDD can be a competitive necessity, as failure to comply could mean market access restrictions or reputational damage within the EU. Yet, the new EU-US trade agreement seeks to harmonize trade terms, possibly helping US companies manage compliance by reducing other trade frictions [2][5].
On the US side, despite the trade deal’s signed status, tariffs under Section 232 and other trade tensions remain under review, with potential escalation if disputes continue [1].
ExxonMobil, one of the largest US oil companies, has expressed concerns about the EU CSDDD, which is due to be phased in from 2027. The company's CEO, Darren Woods, believes the directive threatens US companies with "bone-crushing penalties" and erodes global competitiveness [6].
The CSDDD has significant extraterritorial reach, affecting non-EU companies that meet specific turnover or other criteria within the bloc's market. Environmental campaigners have criticized the proposed simplification of the EU's green regulations as a victory for the oil and gas industry, while more than 180 investors, financial institutions, and companies, including Ikea, EDF, and Nokia, have signed a statement supporting the preservation of the EU's due diligence directive and green reporting rules [7].
In contrast, the Trump administration has used trade talks with international partners to advance the interests of the US oil and gas industry [8]. The US officials have shown a willingness to fight climate laws and regulations, including by pulling out of the Paris Agreement.
In conclusion, the EU-US trade deal facilitates US export competitiveness by reducing tariffs and regulatory barriers while increasing investment and energy trade flows. However, the EU Corporate Sustainability Due Diligence Directive imposes stringent sustainability and human rights compliance obligations on companies—including US firms—affecting their ability to compete in the EU market. Alignment with climate and social governance standards is critical for sustained access and reputational advantage.
- The EU-US trade deal, while enhancing business competitiveness for American companies by reducing tariffs and regulatory barriers, encounters political challenges as it requires further negotiations and may face retaliatory tariffs from the EU.
- Simultaneously, the EU Corporate Sustainability Due Diligence Directive introduces stringent sustainability and human rights compliance obligations for companies operating or exporting to the EU, posing additional costs and governance requirements but also promising market access and reputational benefits for those aligning with global climate and social responsibility standards.
