New 'PROTECT USA Act' Shields Energy and Manufacturing Giants from Foreign Supply Chain Sustainability Rules

If you’re a busy professional, you probably don’t spend much time thinking about how many layers of bureaucracy exist between a European factory and the components in your phone. But a new bill, the “Prevent Regulatory Overreach from Turning Essential Companies into Targets Act of 2025,” or the PROTECT USA Act of 2025, is about to make that supply chain a whole lot less transparent.

The 'What': Banning Compliance with Foreign Rules

This bill has one primary goal: to forbid major U.S. companies from complying with certain foreign laws that require them to check the environmental and social impact of their global supply chains. Think of rules like the European Union’s new Corporate Sustainability Due Diligence Directive (CS3D). The U.S. is essentially telling its key businesses, “Don’t follow those rules—follow ours.” Specifically, Section 4 bans any entity deemed “integral to U.S. national interests” from adhering to a “foreign sustainability due diligence regulation.” The only exception is if the U.S. already has a law that is "substantially similar." Since the U.S. doesn't have many laws like the EU's CS3D, this prohibition is broad.

Who Gets the Shield? The 'Integral' Club

So, who is considered “integral to U.S. national interests” (SEC. 3)? It’s a wide net. It includes any company with a contract or lease with the Federal Government. More importantly, it covers large U.S.-organized companies (or foreign subsidiaries of U.S. companies) that get at least 25% of their income from resource extraction (like mining, farming, or fossil fuels) or from manufacturing (especially defense items or critical minerals). The President also has the power to simply declare any other entity integral. This means the bill primarily benefits the energy, mining, and heavy manufacturing sectors—the ones that often deal with complex, global supply chains that foreign regulators are targeting for environmental and labor accountability.

The Real-World Impact: Trading Transparency for Protection

For regular people, this bill cuts both ways, but mostly focuses on protection over transparency. If you work for one of these large U.S. manufacturers, the upside is that your company might save on compliance costs and avoid regulatory headaches. That could translate to smoother operations and potentially fewer disruptions. However, the cost is accountability. If a U.S. company is sourcing raw materials from a country with lax environmental standards, this bill legally shields them from being forced by a foreign government to clean up their act or report on the damage.

This matters to consumers because foreign due diligence laws often focus on things like forced labor, child labor, and environmental destruction in developing nations. By banning compliance, the U.S. is signaling that its national interest outweighs the need for these specific supply chain checks. If you care about where your products come from and how they are made, this bill makes it significantly harder for those details to come to light.

The Presidential Power Play and Legal Firepower

Section 4 allows a company to petition the President for an exemption if the ban causes “particular hardship.” The President must weigh factors like potential job loss in a local area or disruptions to domestic supply chains. This process concentrates significant power in the executive branch to decide who gets to play by global rules and who doesn't—a massive regulatory carve-out that could easily become political.

Perhaps the biggest hammer in the bill is in Section 5, which gives these “integral” companies serious legal teeth. If a foreign court or entity tries to punish a U.S. company for not following a foreign sustainability rule—say, by imposing a fine or canceling a contract—the U.S. company can sue them in federal court. If they win, they can recover fines, attorney fees, and even punitive damages. Plus, anyone who violates this protection (i.e., tries to enforce the foreign rule against the U.S. company) faces a civil penalty of up to $1,000,000 and can be barred from federal contracts for three years. This isn't just a shield; it's a massive legal weapon designed to deter any attempt to enforce these foreign sustainability rules against U.S. interests.