PROTECT USA Could Complicate CSDDD Supply Contract Renewals
The PROTECT USA bill would preserve ordinary responses to CSDDD data requests while creating a separate risk over contract penalties for refusing them.
Primary lensTrade policy
Sub-topicPolicy monitoring
Evidence base5 records used
Use casePolicy monitoring
A U.S. manufacturer renewing a European supply contract should read the sustainability questionnaire alongside the clause explaining what happens if it refuses. The PROTECT USA Act would preserve room to answer an ordinary business request. It would also prohibit adverse action against a covered company for conduct related to foreign sustainability rules. The commercial consequence attached to a request could therefore become the more contested part of the agreement.
The House Energy and Commerce Committee advanced H.R. 9385 on September 16 by 25 votes to 20. The bill has not become law. Its current wording nevertheless gives trade counsel a concrete reason to examine the next renewal. An exception permitting certain responses would not expressly protect the customer's decision to penalize a refusal.
The House text leaves room to answer
The committee print, Sections 2-4, prohibits covered entities from complying with foreign sustainability due diligence regulations, expressly including the EU's Corporate Sustainability Due Diligence Directive, or CSDDD. Section 2(b) preserves otherwise lawful actions taken to comply with a U.S. statute or in the ordinary course of business. Its examples explicitly include responding to information requests from a business partner, consumer or investor.
That language matters when a manufacturer receives a request about factory conditions, emissions or supply-chain risks. A sustainability question would not, merely by its subject matter, establish prohibited compliance. But the exception also does not settle whether every response requested to satisfy CSDDD would qualify as ordinary business. A mixed-purpose questionnaire could require a closer look at its purpose and the undertaking the supplier is making.
Section 3(a) creates the separate problem. It would bar any person from taking adverse action toward a covered entity for action or inaction related to a foreign sustainability due diligence regulation. The ordinary-business exception expressly qualifies Section 2(a), not Section 3(a). Permission for the supplier to respond would therefore leave a separate question about the consequences of declining.
The print does not define adverse action or explain how to treat a purchasing decision with several commercial and regulatory reasons. A suspension or non-renewal tied to a CSDDD refusal could raise that question. The bill does not establish that every such decision would be prohibited.
The revised EU rules still use contracts
The EU requirements have changed substantially since CSDDD's original adoption. Directive (EU) 2026/470 narrowed coverage and revised the due-diligence process. The general non-EU threshold is more than EUR1.5 billion in EU net turnover, subject to the two-year rule. Separate parent-company and franchising or licensing routes also apply. Being below that threshold does not prevent a company from receiving requests through a covered customer's supply chain. The Commission's current explanation distinguishes direct coverage from these indirect effects.
Article 8 now limits information requests for in-depth assessments to necessary information. For partners with fewer than 5,000 employees, that information must also be unavailable through reasonable alternatives. Articles 10 and 11 nevertheless retain contractual assurances and verification as relevant due-diligence measures.
Mandatory termination has gone. Where adverse impacts remain unresolved, the amended Articles 10(6) and 11(7) retain restrictions on new or extended relationships and conditional suspension. Suspension depends on the law governing the relationship, and the provisions include safeguards for continued engagement and the harms of suspension.
These limits narrow the potential conflict but preserve commercial measures that could engage the House bill's adverse-action clause. Traverse's earlier analysis of Washington's CSDDD requests examined what EU guidance could change. H.R. 9385 would add a U.S. restriction on how a customer responds to a supplier.
Read the covenant alongside its remedy
Consider a hypothetical renewal in which a European customer asks a U.S. manufacturer for factory data, requires a supplier-code assurance, and reserves the right to suspend purchases if the assurance is withheld. Those provisions perform different jobs. Treating them as one sustainability clause would conceal the distinction in the House text.
Contract provision
Function
Question under the House bill
Request for existing factory or supply-chain information
Obtains facts for the customer's assessment
Does the supplier's response qualify as an otherwise lawful ordinary-business action?
Promise to follow a code of conduct, with verification rights
Creates an enforceable undertaking
What conduct is promised, and does fulfilling it amount to covered foreign-law compliance?
Suspension or non-renewal following refusal
Attaches a commercial consequence
Could the decision constitute adverse action related to the foreign regulation?
The table identifies review questions, not settled outcomes. A customer's response to documented labor abuses presents different facts from a decision taken solely because a supplier refuses to sign a CSDDD certification. The proposed statute leaves the legal boundary unresolved. Counsel would need the request, the relevant contract language and the stated basis for the purchasing decision to assess it.
The same discipline applies to the supplier's reply. Calling an assurance voluntary or placing it inside standard terms would not, by itself, answer what obligations it creates. Nor would deleting references to CSDDD establish that the underlying requirement has become ordinary business.
Relief would run through Commerce
The House print covers businesses organized under U.S. state, territorial or District of Columbia law that conduct substantial U.S. operations, plus entities designated by the Commerce secretary. It sets no sector restriction for that first category. A U.S. parent's foreign subsidiary is not automatically included merely because of its parentage.
For a covered manufacturer facing particular hardship, Section 2(c) would provide a petition to Commerce for exemption from the compliance prohibition. The petition must be granted unless the secretary supplies the specified written denial within 30 days. Material financial impact on the applicant is among the required considerations. Filing is not expressly an immediate authorization to comply or a stay of the prohibition.
The enforcement provisions also require careful reading. The stated civil penalty of up to $1 million attaches to violations of Section 3(a), the adverse-action prohibition, or regulations issued under the act. It is not an express automatic fine for answering an EU customer's questionnaire. The current House print contains no express private right of action.
The next renewal needs a record of purpose
For the next contract review, counsel can identify which information the customer needs, the undertaking requested, and the consequence attached to refusal. Keeping the customer's explanation with the renewal documents would make a later assessment more reliable if the House language becomes law or changes during negotiations. Existing obligations continue to require their own analysis today.
The immediate legislative question is whether Congress clarifies ordinary business, adverse action or their interaction. On the EU side, model contractual-clause guidance is due by July 26, 2027. Member States must transpose the amended directive by July 26, 2028. Its due-diligence measures apply from July 26, 2029, under Articles 18 and 37.
From reading to review
Run the numbers on your lane.
The duty calculator runs the current stack for any HTS code and origin. A free account opens full tool output, AD/CVD detail, Chapter 98 processing, and available exports.