Stop EU Overreach Act

The United States has a longstanding and compelling national interest in protecting United States persons from extraterritorial regulatory actions by foreign governments that burden United States commerce, conflict with United States law, and undermine the principles of fair, reciprocal, and rules-based international trade.

The European Union has adopted and is implementing a series of energy and environment-related directives and regulations with significant extraterritorial reach, including the Corporate Sustainability Due Diligence Directive (CS3D), the Corporate Sustainability Reporting Directive (CSRD), the Deforestation Regulation (EUDR), the Carbon Border Adjustment Mechanism (CBAM), and related or successor measures.

These extraterritorial measures impose burdensome mandatory obligations on large companies operating in or deriving significant revenue from the European Union. Such obligations include global supply chain and value chain mapping and due diligence, detailed sustainability and emissions reporting, deforestation-free traceability and geolocation requirements, third-party verification and auditing, public disclosures, and substantial penalties with transposition and implementation deadlines already in effect or approaching in the near term.

These extraterritorial measures apply to conduct, operations, subsidiaries, affiliates, and supply or value chains occurring wholly or substantially outside European Union territory, including the United States operations and supply chains of United States companies, regardless of whether such conduct complies with United States law. This constitutes an unreasonable and discriminatory trade practice burdening United States commerce within the meaning of section 301(b) of the Trade Act of 1974 (19 U.S.C. 2411(b)).

The extraterritorial reach of these measures conflicts with core principles of United States law, including limited liability doctrines, State corporate fiduciary duties, Federal securities requirements, and domestic energy and environmental policy frameworks.

In the August 21, 2025, Joint Statement on a Framework on an Agreement on Reciprocal, Fair, and Balanced Trade, the European Union expressly committed to ensure these measures do not pose undue restrictions on transatlantic trade and to address United States concerns regarding their extraterritorial application to companies from countries with high-quality domestic regulations. The continued extraterritorial provisions of these measures are inconsistent with that commitment.

Notwithstanding the August 2025 commitments and the European Union’s subsequent amendments, these extraterritorial measures continue to impose burdensome obligations on United States persons. The European Union’s own modifications have not resolved the core problems this Act addresses.

Numerous United States trading partners, including Argentina, Australia, Brazil, India, South Africa, and the United Kingdom, have expressed shared concerns about the extraterritorial reach of these measures, reflecting a multilateral, rules-based objection rather than a bilateral dispute.

Section 301 of the Trade Act of 1974 (19 U.S.C. 2411) authorizes the United States Trade Representative to investigate and respond to such foreign government practices, and the United States has a compelling national interest in deploying that authority to protect United States persons from extraterritorial regulation that conflicts with United States law and the principles of fair and reciprocal trade.

Consultation requirement— In conducting an investigation under this section, the USTR shall—

Initial report— Not later than 90 days after the date of the enactment of this Act, the USTR shall submit to the appropriate congressional committees a report including—

Determination report— Not later than 30 days after making a determination under section 3(e), the USTR shall submit to the appropriate congressional committees a report including—

limit the authority of the President or the USTR to negotiate, enter into, or modify trade agreements with the European Union;

affect any other authority of the USTR or the President under the Trade Act of 1974 (19 U.S.C. 2101 et seq.) or any other provision of law; and

constitute an affirmative finding that any specific act, policy, or practice of the European Union violates any provision of Federal law or any trade agreement to which the United States is a party.

Full sunset— The requirements of this Act shall terminate with respect to each covered extraterritorial measure on the date on which the USTR certifies to the appropriate congressional committees that the requirements of subsection (a)(1) have been satisfied with respect to each covered extraterritorial measure.

Certification inclusion— A certification under this section shall include a determination that the repeal, amendment, or binding agreement fully and effectively eliminates the burden on United States commerce attributable to the relevant extraterritorial measure.

Appropriate congressional committees— The term “appropriate congressional committees” means—

Covered extraterritorial measures— The term “covered extraterritorial measures” means—

Extraterritorial obligations— The term extraterritorial obligations means, with respect to the covered extraterritorial measures, any requirement applicable to a United States person with respect to the conduct, operations, or relationships of such a person occurring outside the territory of the European Union, including obligations relating to—

United States person— The term United States person means—

USTR— The term USTR means the United States Trade Representative.