The "PROTECT USA Act of 2025" shields essential U.S. companies from burdensome foreign sustainability regulations that could harm the American economy and national interests.
Bill Hagerty
Senator
TN
The "PROTECT USA Act of 2025" aims to safeguard U.S. economic interests by preventing entities crucial to national interests from complying with foreign sustainability due diligence regulations that could negatively impact domestic value chains and international trade. It prohibits adverse actions against these entities for complying with the Act and allows them to seek exemptions from the prohibition under certain hardship conditions. The bill also establishes legal recourse for entities harmed by violations of the Act, including the potential for significant damages and penalties.
New Bill Blocks Certain US Companies from Following Foreign Environmental and Social Rules
Okay, let's break down the "PROTECT USA Act of 2025." At its core, this proposed legislation aims to stop certain U.S.-linked companies from complying with environmental or social reporting and action requirements imposed by foreign governments. The bill specifically targets what it calls "foreign sustainability due diligence regulations," pointing directly to rules like the European Union's Corporate Sustainability Due Diligence Directive. The stated goal is to shield American economic interests, particularly in sectors like energy, mining, manufacturing, and agriculture, from foreign regulatory pressures that differ significantly from U.S. law.
Who's In and What's Out?
The bill casts a wide net for which companies are covered, defining an "entity integral to the national interests of the United States." This includes businesses working with the federal government, those organized under U.S. laws, and even foreign subsidiaries if a chunk (25% or more) of their revenue comes from key sectors like resource extraction (think oil, gas, minerals, timber, agriculture), manufacturing, defense production, or dealing in critical minerals (which explicitly includes fossil fuels). The President can also designate other entities. These designated companies are prohibited by Section 4 from following foreign sustainability rules unless it's necessary for ordinary business dealings or required by a specific U.S. law. Think of it as drawing a line: if a foreign government says you need to report on your supply chain's carbon footprint according to their standards, this bill could say, "Nope, not if you're one of these designated US-interest companies."
The Exemption Clause
What if following this U.S. law creates a major problem for a company trying to do business internationally? Section 4 includes an escape hatch. An entity facing hardship because of this prohibition can petition the President for an exemption. The President then has 30 days to weigh the request, considering factors like the impact on U.S. supply chains, the economy, jobs, national interests, and whether the ban prevents the company from selling off a business unit subject to the foreign rules. The decision must be provided in writing, explaining the reasoning.
Legal Armor and Penalties
Section 5 acts like a legal shield. It prohibits any "adverse action" against these key U.S. entities for not complying with the foreign sustainability rules. Furthermore, it states that foreign court judgments against these companies related to such regulations generally won't be recognized or enforced in U.S. courts. If someone does take adverse action against a company following this U.S. law, the company can sue in federal court. Potential remedies include compensatory and punitive damages (up to $1 million), legal fees, and other relief. Violating this Act carries its own teeth: potential civil penalties up to $1 million and a possible ban from federal contracts for up to three years, decided by the President.