Prevent Regulatory Overreach from Turning Essential Companies into Targets Act of 2025; PROTECT USA Act of 2025
Summary
The "Prevent Regulatory Overreach from Turning Essential Companies into Targets Act of 2025" (PROTECT USA Act) aims to shield U.S. entities integral to national interests from foreign sustainability due diligence regulations, particularly those similar to the European Union's Corporate Sustainability Due Diligence Directive. It prohibits these entities from complying with such regulations, defining 'entities integral to the national interests' broadly to include companies doing business with the federal government or involved in resource extraction, manufacturing, or critical mineral processing. The bill includes provisions for hardship relief and protection against adverse actions for non-compliance.
Expected Effects
The act would prevent U.S. companies deemed vital to national interests from adhering to certain international environmental and social governance (ESG) standards. This could reduce the regulatory burden on these companies, potentially lowering operational costs. However, it may also isolate them from global markets that increasingly demand sustainability compliance.
Potential Benefits
- Reduces regulatory burden on U.S. companies, potentially lowering costs.
- Protects U.S. businesses from foreign regulations that may conflict with domestic policies.
- Supports industries critical to national security and economic stability.
- Provides a hardship relief process for companies facing significant challenges due to the prohibition.
- May encourage domestic investment by reducing compliance costs.
Potential Disadvantages
- May hinder U.S. companies' access to international markets that require sustainability compliance.
- Could lead to environmental and social concerns if companies are not held to certain standards.
- May strain relationships with international partners who have adopted sustainability regulations.
- Could create a competitive disadvantage for U.S. companies compared to those adhering to global sustainability standards.
- The broad definition of 'entity integral to the national interests' may lead to unintended consequences.
Most Disadvantaged Areas:
Constitutional Alignment
The bill's alignment with the U.S. Constitution is complex. Congress has the power to regulate commerce with foreign nations (Article I, Section 8, Clause 3), which could justify this legislation. However, the bill's potential impact on international relations and trade agreements could raise questions about the balance of power between the legislative and executive branches. The Tenth Amendment reserves powers not delegated to the federal government to the states or the people, and this bill could be seen as an overreach into areas traditionally regulated at the state or international level.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).