The tariff debate is back in the United States, but analysts believe President Donald Trump's administration should focus elsewhere to curb the European Union's growing influence over U.S. business giants.
John Tamny reminds through his article that the importance of the US market for companies outside the US remains catalytic. Anna Worthington, director of the British barber shop chain Ruffians, told the New York Times that "if you want to be a brand and succeed, you have to operate in the US". This phrase, the columnist notes, highlights the strength of the American economy as a global benchmark.
Despite the fact that the US is a pole of attraction for foreign brands, the same dynamic applies the other way around: American products and services are extremely popular internationally. Tamny recalls the development of companies such as McDonald's, Starbucks and Apple in China, where thousands of stores operate and significant volumes of products are sold.
However, the new European Sustainability Directives, CS3D and CSRD, create significant constraints on American businesses. They concern companies with revenues of more than €450 million within the EU, imposing obligations that – according to the American Chamber of Commerce – constitute a form of EU regulatory supremacy. The Chamber warns that the U.S. may be driven into an environment where U.S. companies have to adapt their global operations to regulatory frameworks that do not apply under U.S. law.
These requirements are classified as costly, as they extend even to activities outside the European territory. Economist Harold Furchtgott-Roth of the Hudson Institute estimates that compliance costs could reach up to $1 trillion for U.S. businesses.
Despite the reasonable request for reaction, the columnist argues that Washington should not respond with new tariffs, which also hit the US economy. Instead, the Trump administration is required to make it clear that U.S. companies are not accountable to European regulators for activities within the U.S. and that they will not be required to align with European standards.
In conclusion, Tamny notes that the market that offers the most growth is the one that has the most power — and Worthington's phrase shows, as she writes, who needs whom the most.
