President Trump says the European Union is blocking free trade through “non-monetary trade barriers.” He is correct – and it’s about time someone called the EU out on this.
Brussels is a world-leader in crafting aggressive and entirely unnecessary regulations which make it harder to import things into Europe. If Trump can get the EU to lower those barriers and roll back its immense regulatory state, that would be a significant win for the U.S., as well as the rest of the world, which also wants to do business in Europe – not to mention average, hardworking Europeans, who lose out from Brussels’ bad policy.
Europe has been on an eco-socialism high for years. After war broke out in Ukraine, inflation skyrocketed, supply chains were disrupted, and energy prices became out of control. While other governments were grappling with those problems, the European Union was busy passing a raft of world-first environmental laws which centralized a huge amount of policymaking power in the hands of Brussels lawmakers, all in the name of saving the planet.
In the process, they created a series of new non-tariff trade barriers which risk making Europeans – and the rest of the world – a little poorer each day. By pushing back against these regulations, the U.S. would be both fighting for its own interests and doing a service to Europeans, too. Ironically, rolling back the EU’s new green rules would also help the planet, since many of its eco-laws do more harm than good to the environment.
The EU says its new green rules are essential to prevent deforestation. That’s not true. Its flagship policy on the issue, the EU Deforestation Regulation (EUDR) is a lesson in how not to govern trade. It requires companies wanting to sell products like cocoa, coffee, and palm oil in Europe to prove their supply chains do not contribute to deforestation.
The ‘proof’ the EU demands is an absurd quantity of paperwork which will force many companies to hire whole new compliance teams, sending grocery prices skyrocketing for ordinary consumers. GlobalData researchers estimate the cost of complying with the EUDR at a whopping $1.5 billion.
Countless smaller companies, especially in poor countries, will be unable to find the money for all the paperwork. Selling in the European market will become prohibitively expensive for countless farmers trying to make an honest living selling their wares. Europeans will face less choice and higher prices in grocery stores. Everyone loses.
The U.S. Chamber of Commerce (USCC) decries the EUDR as an “unfair trade practice.” Even with Europe granting the U.S. a ‘low-risk’ designation, the trade barriers are still far too high. “U.S. government concerns about the feasibility of the EUDR have not been addressed,” says the USCC. That’s the understatement of the century. The rules were due to come into force in December 2024. Governments and businesses around the world (including in Europe) loudly called out the craziness of the new paperwork requirements, leading the EU to enforce a humiliating 12-month delay at the eleventh hour.
The EU, then, is aware of the problems with the EUDR. Nonetheless, it remains determined to press ahead with the new implementation date of December 2025, arguing the fight against deforestation is worth the cost. Unfortunately, despite its huge economic costs, the EUDR does nothing to prevent deforestation because it relies on European politicians fairly assigning each country an arbitrary ‘risk’ categorization. Many countries, such as Malaysia, say their risk categorization is based on faulty data.
Malaysia, one of the world’s top palm oil producers, is a success story in preventing deforestation. According to Global Forest Watch, it achieved a 57% drop in ‘primary forest loss’ as of 2022, thanks to innovations in sustainable palm oil. It has also kept a promise to keep more than half its entire land mass under forest cover. Meanwhile, France and Germany – the EU’s big dogs who drive its green agenda – have seen their forest cover plummet to less than a third of their land masses.
Europe applies a double standard on trade. It punishes companies based abroad – such as smallholder farmers in Malaysia – while giving favorable treatment to its heavily-unionised domestic industries. Brussels lawmakers are willing to erect enormous barriers to trade like the EUDR, even when it undermines their environmental goals and hurts the European economy. The U.S., like Malaysia, stands to lose out from Europe’s overregulation. No wonder the EUDR has irked the Trump administration.
Europe’s non-tariff trade barriers don’t stop with the EUDR. On deforestation alone, Brussels has recently imposed two more huge hurdles to doing business. The Corporate Sustainability Due Diligence Duty (CSDDD) and the Corporate Sustainability Reporting Directive (CSRD) create mountains more paperwork for honest companies.
Those two regulations shift the burden of green background checks onto foreign companies, compelling them to provide extensive proof that all their partners adhere to the EU’s strict ESG rules. Since unveiling them, Brussels has come up with a feeble ‘simplification’ plan for these absurd rules, which is convincing nobody. Even German chancellor Friedrich Merz now says Brussels should scrap them altogether.
Europe is awash with non-tariff trade barriers like these. They make Europeans poorer and, crucially, they make doing business in Europe much more expensive for non-European companies – including American ones. The U.S. Trade Representative office estimates the EUDR alone could hit $8.6 billion of American businesses.
If Trump succeeds in pushing the EU to roll back its destructive green regulation agenda, it’s not an exaggeration to say the America First movement would go down in history as the savior of European free trade. That would be a good thing for everyone – in Europe, the U.S., and beyond.
