Will the U.S/EU Trade Deal lead to additional changes in European ESG legislation?

As a follow-up to the political agreement reached between U.S. President Donald Trump and EU Commission President Ursula von der Leyen regarding cross-Atlantic trade on July 27th, 2025, the United States and the EU issued a Joint Statement on a United States-European framework on an agreement on reciprocal, fair and balanced trade on August 21, 2025 ("Framework Agreement"). 

The United States has expressed concerns about European ESG legislation as non-tariff barriers to trade in the past. Indeed, various U.S. politicians have proposed legislation that would prohibit U.S. companies from complying with European ESG legislation. Therefore, it cannot be a surprise that the Framework Agreement also addresses non-tariff barriers to trade and even EU ESG legislation.

The European Union commits in the Framework Agreement to reducing the administrative burden of the EU's Corporate Sustainability Due Diligence Directive ("CSDDD") on businesses and to proposing changes to its civil liability regime as well as its climate transition obligations. Further, the European Union promises to address US concerns regarding the imposition of CSDDD requirements on companies of non-EU countries with relevant high-quality regulations. It is not clear from the Framework Agreement whether these commitments refer to those that are currently being discussed between the European institutions or to additional simplifications of the CSDDD. While the European Commission has authority to represent the EU in trade negotiations, changes to the CSDDD require the sign-off by the European Council and the European Parliament.

The Framework Agreement also states the European Commission commits to providing additional flexibilities in the Carbon Border Adjustment Mechanism ("CBAM") in addition to the recently agreed increase of the de minimis exception. This language appears to indicate that the European Commission intends to create administrative relief without an additional change to CBAM.

While the Framework Agreement is certainly designed to provide more insight on what has been agreed between the United States and the EU on July 27th, 2025, it is important to note that the Framework Agreement is only meant to be “a first step in a process that can be further expanded over time …". Thus, it remains to be seen whether the trade negotiations between the United States and the European Union will indeed lead to additional simplifications of EU ESG legislation.