Europe Is Rewriting the Rules: What U.S. Companies Must Do Next
Author/s
Eliseo M. Martínez
Managing partner | IUS + AEQUITAS TRIAL LAWYERS | Madrid, Spain
Guillermo M. Peral Vaello, MCIArb
Litigation & arbitration lawyer | IUS + AEQUITAS TRIAL LAWYERS | Madrid, Spain
The Trump trade agenda, the war in Ukraine, energy weaponisation, China’s industrial surge and fragmented supply chains have confirmed something Europe had already begun to understand: the European Union can no longer assume that openness alone will protect its markets or strategic interests.1 To many American executives and investors, Europe has long appeared hyper-regulated and protectionist, at odds with the U.S. preference for scale, speed and openness. Yet the shocks of the last decade have not made Europe less bureaucratic; they have made its bureaucracy strategic.
This strategic shift extends beyond Brussels declarations into Member States through directly applicable EU regulations, the national transposition of directives, domestic investment-screening and procurement regimes, and the enforcement priorities of national authorities. Although the authors’ practice in Spain, the issues most consequential for U.S. companies are increasingly framed at European level before being implemented nationally, so any jurisdictional analysis of those issues must begin with the European strategy that shapes them.
The central reference point for this renewed European strategy is the Draghi competitiveness agenda:2 legal, tax, trade, ESG, data, subsidy, procurement and investment rules should no longer be treated as separate files.3 Europe still needs U.S. capital, cloud infrastructure, software, defence capacity, AI, and clean-energy technology. But access conditions are changing. Companies that help Europe reduce dependencies, localise capability, protect data, or strengthen critical supply chains will find opportunity, but purely financial buyers, subsidy-backed bidders, non-European data controllers, and supply-chain managers unwilling to absorb European standards will face resistance.
Before 2030, the principal market-shaping instruments for U.S. companies will be the AI Act,4 CS3D,5 CSRD,6 foreign investment screening,7 the Foreign Subsidies Regulation,8 the DMA9 and DSA,10 cloud-sovereignty rules,11 the Critical Raw Materials Act,12 and procurement rules increasingly sensitive to social, innovation and environmental criteria.13
Our first prediction is clear, but it requires qualification: the EU will become more interventionist while remaining selectively open to foreign capital, technology, and industrial capacity. The question for U.S. companies is therefore not simply whether Europe remains accessible but on what strategic terms access will be granted; which European objective does our investment advance, and what commitments on resilience, localisation, governance or supply-chain security will make that contribution credible? Energy, cloud, semiconductors, defence, AI, health data, critical minerals, and advanced manufacturing are no longer merely commercial sectors they have become strategic policy fields in which market access, investment, and regulation increasingly converge.
Second, transactions will become harder to clear when presented as M&A. U.S. deal teams are already screening targets for sensitive technologies, intellectual property, customers, supply chain role, data flows, and links to critical infrastructure14 before signing; incorporating FDI and foreign-subsidy conditions into transaction documents;15 extending long-stop dates;16 preparing mitigation narratives around governance, information access, continuity and impact in local employment;17 mapping public financial contributions;18 and using European partners, local boards, or ring-fenced information protocols.19
Third, sustainability will become a U.S. boardroom and market-access issue. Through CS3D, Europe is turning sustainability from disclosure narrative into operating discipline. Supplier evidence, human-rights diligence, environmental controls, remediation, and board reporting will increasingly affect whether a U.S. company can sell, acquire, bid, or partner in Europe.
The Omnibus I package,20 proposed in 2025 and enacted in 2026 amid European competitiveness concerns and sustained U.S. pressure,21 narrows, delays, and simplifies significant parts of the regime. But experts conclude that it does not abandon the underlying model and that will remain highly relevant.22 As of today, Washington’s increasingly aggressive policies against ESG mandates and the growing tensions with a highly perceived weak EU only serve to position it as the champion of the area where it feels strongest: sustainability due diligence policies. Essentially, it’s a tug-of-war in which each side strengthens its position on the policy that best suits its interests, radicalising its stances to the detriment of open and global trade. Here, this particularly harms US companies by using these barriers as a trade weapon.
U.S. companies are already responding to meet those EU demands. Law firms are sending board memoranda;23 groups are assessing whether they, their affiliates or business partners fall within CS3D;24 auditors are expected to request CSRD and CS3D evidence;25 supply-chain teams are building supplier documentation, questionnaires, audit, and termination rights;26 and U.S. cloud providers are offering European localisation and sovereignty features.27
This adaptation is happening while the American reaction is internally conflicted from the EU’s standpoint. U.S. officials and institutions such as the U.S. Chamber of Commerce have portrayed European sustainability and digital rules (not surprisingly) as burdensome extraterritorial regulation and, increasingly, as possible grounds for retaliation.28 Yet, paradoxically, the U.S. legal system may magnify the enforcement of those very same European rules. For instance, the CS3D transforms ESG standards from voluntary corporate policy into a binding legal obligation. Once that threshold is crossed, U.S. plaintiffs can invoke Delaware’s famous Caremark doctrine29 to challenge boards in American courts over their compliance with EU laws. Consequently, shareholders will sue boards over whether they treated EU compliance as a mission-critical risk, maintained effective reporting systems, and responded in good faith to concrete red flags. Plaintiffs will also weaponise internal CS3D audits to prove that a company’s public disclosures mismatched its internal reality. 30 The resulting tension is striking. While Washington fights the ‘‘Brussels effect’’ politically, the ‘‘Delaware effect’’ reinforces it through private litigation. This creates a severe double-imposition of control and will subject U.S. companies to far greater governance scrutiny than their European competitors.
Nor is U.S. industrial policy irrelevant in Europe. IRA credits, CHIPS Act support, and state incentives may constitute foreign financial contributions in acquisitions or tenders.31 A U.S. subsidy-backed bidder may face scepticism specially in batteries, semiconductors, defence, cloud, or clean technology, and U.S. export controls on AI chips may force supply-chain bifurcation and separate technology arrangements for U.S., European, and China-facing operations.32 U.S. cloud dominance is already triggering requirements for EU hosting, local controls, ring-fenced support, and limits on foreign access.33
The two leading risks are, therefore, regulatory collision and strategic exclusion. Regulatory collision arises were EU obligations conflict with U.S. politics, disclosure law, ESG backlash, or blocking measures. Strategic exclusion means losing acquisitions, public tenders, data projects or critical-sector partnerships because the company cannot credibly answer Europe’s resilience concerns.
The opportunity is that Europe’s assertiveness creates investable gaps, and Brussels may have to remain flexible while recognising its dependence on U.S. capital and technology. Certainly, Europe needs capital and scale in grids, clean energy, AI, cloud, defence,34 dual-use technologies, critical minerals, circularity, and advanced manufacturing.
Our practical recommendation is that U.S. businesses trading substantially with the EU should create a Europe Strategy Committee reporting to the GC and board, rather than another Brussels compliance group. For every acquisition, bid, or launch, it should ask what we have stated at the beginning: What European capability do we strengthen? Also, what local footprint increases trust? And, from a lawyer point of view, what governance record will U.S. plaintiffs see if something goes wrong?
Europe can no longer be managed as a compliance appendix to a global U.S. strategy. It requires its own board-level operating model. The winners will design deals around resilience, build supply-chain evidence before customers demand it, treat U.S. subsidies as European diligence items, localise trust in data and cloud, and create a record showing that risks were understood. So at the end, from our starting premise, they will stop asking only, “What must we comply with?” and start asking, “What European strategic objective do we help solve — and can our board prove it understood the answer?”
Endnotes:
2 Mario Draghi is an Italian economist and former President of the European Central Bank (2011–2019) and Prime Minister of Italy (2021–2022). At the request of the European Commission, he prepared The Future of European Competitiveness, presented in September 2024. Commonly known as the “Draghi Report,” it identified Europe’s widening productivity and innovation gap, high energy costs, fragmented capital markets and growing strategic dependencies, and called for coordinated action on industrial policy, investment, decarbonisation, technology and economic security. The report has become a central reference point for the EU’s competitiveness agenda and provided the analytical basis for the Commission’s subsequent Competitiveness Compass.
3 Draghi, M. (2024). The future of European competitiveness: A competitiveness strategy for Europe (Part A). European Commission. https://commission.europa.eu/document/download/97e481fd-2dc3-412d-be4c-f152a8232961_en, pp. 3–8, 18–19 and 60. The report treats innovation, energy, capital markets, skills, trade, defence and regulatory governance as interdependent components of a single competitiveness strategy. Read together, those converging fields help explain why a single U.S. transaction or market-entry plan may raise competition, FDI, foreign-subsidy, data, procurement and sustainability questions simultaneously.
4 Burwell, F. G., & Propp, K. (2026). Digital sovereignty: Europe’s declaration of independence? Atlantic Council. https://www.atlanticcouncil.org/in-depth-research-reports/report/digital-sovereignty-europes-declaration-of-independence/; European Parliament & Council of the European Union. (2024). Regulation (EU) 2024/1689 of 13 June 2024 laying down harmonised rules on artificial intelligence. Official Journal of the European Union. https://eur-lex.europa.eu/eli/reg/2024/1689/oj/eng. The AI Act reaches non-EU providers when systems are placed on the EU market and, in specified circumstances, where their output is used in the Union. Depending on the company’s role and the system’s classification, compliance may require use-case inventories, risk classification and evidence concerning technical documentation, data governance, transparency, human oversight, logging, accuracy, robustness and cybersecurity.
5 European Parliament & Council of the European Union. (2024). Directive (EU) 2024/1760 of 13 June 2024 on corporate sustainability due diligence. Official Journal of the European Union. https://eur-lex.europa.eu/eli/dir/2024/1760/oj/eng. The Corporate Sustainability Due Diligence Directive (CS3D/CSDDD) requires covered companies to integrate human-rights and environmental due diligence into policies and risk-management systems, identify and prioritise adverse impacts, adopt preventive and corrective measures, establish notification and complaints procedures, monitor effectiveness and communicate on due diligence. U.S. companies may be affected directly through European turnover thresholds or indirectly through requests from covered customers and business partners. Supplier codes, forced-labor controls, commodity sourcing, environmental policies, grievance mechanisms and contractual remediation practices may therefore be tested even where the U.S. supplier is not itself directly within scope. The Directive was materially amended by Omnibus I in 2026, so scope, timetable and liability must be assessed under the amended framework.
6 European Parliament & Council of the European Union. (2022). Directive (EU) 2022/2464 of 14 December 2022 as regards corporate sustainability reporting. Official Journal of the European Union. https://eur-lex.europa.eu/eli/dir/2022/2464/oj/eng, European Parliament & Council of the European Union. (2026). Directive (EU) 2026/470 of 24 February 2026 amending certain corporate sustainability reporting and due-diligence requirements. Official Journal of the European Union. https://eur-lex.europa.eu/eli/dir/2026/470/oj/eng and Weil, Gotshal & Manges LLP. (2026). The EU Omnibus I Directive—Now in force. https://www.weil.com/-/media/files/pdfs/2026/march/the-omnibus-i-directive-now-in-force.pdf. The Corporate Sustainability Reporting Directive creates extensive sustainability-data, reporting, governance and assurance requirements. U.S. groups may be affected through securities listed on an EU regulated market, qualifying EU subsidiaries or branches, or requests for information from customers and other value-chain partners. European sustainability information may also need to be reconciled with U.S. securities disclosures and internal controls. Omnibus I substantially narrowed and delayed elements of the CSRD and CS3D but did not eliminate the European model of sustainability reporting and due diligence.
7 European Parliament & Council of the European Union. (2026). Regulation (EU) 2026/1386 of 17 June 2026 on the screening of foreign investments in the Union. Official Journal of the European Union. https://eur-lex.europa.eu/eli/reg/2026/1386/oj/eng; Kokkoris, I. (2026). A spider’s web: Regulatory oversight and the interplay between EU merger control, foreign direct investment screening (EU and national), and Foreign Subsidies Regulation. Yearbook of European Law. https://doi.org/10.1093/yel/yeaf009. The Regulation is the authority for the final common minimum framework, mandatory national screening mechanisms and coverage of certain EU investors ultimately controlled from outside the Union. Kokkoris supports the broader point that parallel merger, FDI and foreign-subsidy reviews can create duplication, divergent outcomes and legal uncertainty for the same transaction.
8 European Parliament & Council of the European Union. (2022). Regulation (EU) 2022/2560 of 14 December 2022 on foreign subsidies distorting the internal market. Official Journal of the European Union. https://eur-lex.europa.eu/eli/reg/2022/2560/oj/eng and European Commission. (2026). Guidelines on the application of certain provisions of Regulation (EU) 2022/2560 on foreign subsidies distorting the internal market. https://eur-lex.europa.eu/eli/C/2026/224/oj/eng. The Foreign Subsidies Regulation establishes a distinct EU control system for financial contributions granted by non-EU public authorities. It applies principally through mandatory notification regimes for qualifying concentrations and public-procurement procedures, while also granting the European Commission broad ex officio investigatory powers. Grants, tax benefits, loans, guarantees, capital injections, public contracts and other arrangements involving U.S. federal, state or local authorities may need to be identified, quantified and explained. A financial contribution is not automatically a distortive foreign subsidy, but it may still be relevant to notification and disclosure obligations.
9 European Parliament & Council of the European Union. (2022). Regulation (EU) 2022/1925 of 14 September 2022 on contestable and fair markets in the digital sector (Digital Markets Act). Official Journal of the European Union. https://eur-lex.europa.eu/eli/reg/2022/1925/oj/eng. The DMA regulates designated gatekeepers providing core platform services and addresses, among other matters, self-preferencing, anti-steering, app-store access, interoperability, data combination and use of business-user data. Many designated gatekeepers are headquartered in the United States, making the DMA a direct product-design and market-access issue for major U.S. digital groups and businesses dependent on their platforms.
10 European Parliament & Council of the European Union. (2022). Regulation (EU) 2022/2065 of 19 October 2022 on a Single Market for Digital Services (Digital Services Act). Official Journal of the European Union. https://eur-lex.europa.eu/eli/reg/2022/2065/oj/eng. The Digital Services Act regulates intermediary services according to their role and scale, with enhanced obligations for online platforms and very large online platforms or search engines. It addresses matters such as illegal-content procedures, transparency of advertising and recommender systems, trader traceability, dark patterns, protection of minors, content moderation and systemic-risk assessment. For U.S. companies, the DSA is therefore relevant both to providers operating in Europe and to businesses that sell, advertise or distribute content through regulated platforms.
11 Burwell, F. G., & Propp, K. (2026), pp. 8, 16–18; European Parliament & Council of the European Union. (2016). Regulation (EU) 2016/679 (GDPR). https://eur-lex.europa.eu/eli/reg/2016/679/oj/eng; European Parliament & Council of the European Union. (2023). Regulation (EU) 2023/2854 (Data Act). https://eur-lex.europa.eu/eli/reg/2023/2854/oj/eng. European data regulation extends beyond GDPR compliance. The Data Act governs connected-product data and cloud switching, while digital-sovereignty expectations may separately affect sensitive-sector procurement through concerns about data location, exposure to non-EU governmental access, operational continuity and dependence on non-EU providers.
12 European Parliament & Council of the European Union. (2024). Regulation (EU) 2024/1252 of 11 April 2024 establishing a framework for ensuring a secure and sustainable supply of critical raw materials. Official Journal of the European Union. https://eur-lex.europa.eu/eli/reg/2024/1252/oj/eng. The Regulation sets benchmarks for extraction, processing, recycling and supply diversification and is likely to create commercial opportunities in mining technology, processing, recycling, traceability, project finance and long-term offtake. Its product-related provisions include information on permanent magnets, recycled content and environmental footprint; they should not be described as a general disclosure duty covering all supply-chain risks.
13 Ashton, D., & Karamfilova, E. (2026). EU public procurement legislation: Implementation and upcoming review (PE 785.688). European Parliamentary Research Service. https://www.europarl.europa.eu/RegData/etudes/BRIE/2026/785688/EPRS_BRI%282026%29785688_EN.pdf. The briefing documents the increasing use of procurement to pursue strategic, environmental, social and innovation objectives beyond price. As a practical recommendation, U.S. bidders in sensitive sectors may prepare a “resilience dossier” explaining their European footprint, supply chain, security arrangements, subsidy exposure, data controls and continuity plans, in order to advance evidencing of compliance.
14 Kokkoris, I. (2026), pp. 14–19; Freshfields Bruckhaus Deringer. (2026). Foreign Investment Monitor—June 2026, pp. 12–14. https://www.freshfields.com/globalassets/our-thinking/campaigns/fi-monitor/june-2026/issue-12-fi-monitor-june-2026.pdf. Freshfields specifically recommends an early assessment of the target’s technologies, intellectual property, customers, government and defence contracts, supply-chain role, data flows and links to critical infrastructure. Kokkoris supports the wider sectoral breadth of EU and national screening, including critical infrastructure, sensitive technologies and personal data.
15 Regulation (EU) 2022/2560, arts. 20 and 28. The Regulation establishes separate notification regimes for qualifying concentrations and procurement procedures. Freshfields, rather than those provisions themselves, supports the drafting recommendations: distinct conditions precedent, filing responsibilities, cooperation and information-sharing obligations, efforts standards, remedy allocation, termination rights and reverse-break-fee arrangements. For a further insight see Freshfields Bruckhaus Deringer (2026), pp. 12–14.
16 Ibid., the report explains that FDI review may involve pre-notification, sequential multi-jurisdictional processes, sensitive information requests and remedy discussions, and notes that long-stop periods of 12 to 18 months are no longer unusual in complex cross-border transactions. Regulatory calendars should therefore be integrated into transaction planning before signing.
17 Ibid., pp. 13–14 and 24–25. Examples of possible mitigation include security-of-supply commitments, governance constraints, limits on technology or data access, IT segregation, localisation, investment obligations, continued local supply and reporting duties. The precise package is case-specific and can materially affect valuation and post-closing integration.
18 Regulation (EU) 2022/2560, art. 3. The concept of a foreign financial contribution is broader than a subsidy and can include grants, tax incentives, loans, guarantees, equity injections, debt relief, public contracts and other benefits involving non-EU public authorities or attributable entities. Companies should therefore inventory contributions before a qualifying acquisition or tender; whether any contribution confers a selective benefit and distorts the internal market is a separate substantive question.
19 Freshfields Bruckhaus Deringer (2026), pp. 13–14 and 24–25. European partners or local boards are additional structuring options proposed here, but they do not themselves answer ultimate-control concerns: authorities will examine reserved matters, information rights, practical dependencies and the substance of post-closing arrangements.
20 European Parliament & Council of the European Union. (2026). Directive (EU) 2026/470 of 24 February 2026 amending certain corporate sustainability reporting and due-diligence requirements. Official Journal of the European Union. https://eur-lex.europa.eu/eli/dir/2026/470/oj/eng. Adopted as the principal substantive measure of the EU’s Omnibus I simplification package, the Directive materially narrows and simplifies elements of the CSRD and CS3D/CSDDD regimes, including their scope, reporting and due-diligence obligations, timetables, liability and sanctions. Although the reform reduces the regulatory burden and reach of the original framework, it does not abandon the EU model of mandatory sustainability reporting and corporate due diligence.
21 The Commission proposed Omnibus I in February 2025, and Directive (EU) 2026/470 entered into force on 18 March 2026. It materially narrowed scope, delayed implementation and modified substantive, liability and sanctions provisions. For a greater insight on the topic, see Weil, Gotshal & Manges LLP. (2026). The EU Omnibus I Directive—Now in force. https://www.weil.com/-/media/files/pdfs/2026/march/the-omnibus-i-directive-now-in-force.pdf. For the contemporaneous U.S. policy critique and pressure for further narrowing, see U.S. Chamber of Commerce. (2025). Bad for business: The extraterritorial dimensions of the EU’s CS3D. https://www.uschamber.com/international/bad-for-business-the-extraterritorial-dimensions-of-the-eus-cs3d.
22 Enriques, L., Gatti, M., & Shapira, R. (2026). How the EU Sustainability Due Diligence Directive could reshape Corporate America. Stanford Law Review, 78, 241–301, pp. 293–294. https://review.law.stanford.edu/wp-content/uploads/sites/3/2026/02/Enriques-et-al.-78-Stan.-L.-Rev.-241.pdf. Addressing the 2025 Omnibus proposal—not the final 2026 Directive—the authors concluded that substantial narrowing could weaken but would not necessarily eliminate the CS3D– Caremark dynamic. The final legal position must therefore be read with Directive (EU) 2026/470 and the Weil analysis cited above.
23 Enriques, Gatti & Shapira (2026), pp. 245–246 and 288–289. The authors record that large U.S. law firms had circulated client memoranda and identify two immediate tasks: assess whether the company, its affiliates or business partners fall within CS3D, and identify gaps between current policies and the Directive’s requirements. They also suggest reconsidering the allocation of board and committee oversight and the expertise available to directors.
24 Ibid., pp. 288–289. The work supports entity scoping and a comparison between existing policies and CS3D requirements. In practice, those steps can be implemented through a legal-entity and revenue map, documented direct and indirect exposure analysis and a prioritised gap assessment; those implementation tools are the authors’ practical elaboration and must be updated for the 2026 amendments.
25 Furchtgott-Roth, H. (2025). The European Union’s CSRD and CS3D: The invisible threats to the United States, pp. 4–6. Hudson Institute. https://s3.us-east-1.amazonaws.com/media.hudson.org/100625_Furchtgott-Roth_EU_Regs_Memo.pdf. From a critical U.S. policy perspective, the report anticipates that accounting and audit firms will seek information and documentation concerning clients’ compliance. It supports the expectation of evidentiary demands, but not every internal control measure that a company may choose to adopt.
26 Ibid., p. 2, predicts that CS3D will transmit documentation demands through supply chains. As a practical implementation matter, companies may use questionnaires, risk scoring, contractual audit rights, corrective-action plans, flow-down clauses and suspension or termination rights. Those tools are not a checklist stated in that report and should be risk-based, proportionate and calibrated to the amended Directive and the supplier’s role.
27 Burwell & Propp (2026), pp. 16–18. The report describes European concern about U.S. governmental access to cloud data, AWS sovereign-cloud initiatives, Microsoft’s EU Data Boundary and Microsoft’s commitments concerning continuity of European cloud operations. These examples support the narrower point that sovereignty is becoming a product-design and procurement issue; specific requirements on key management, staffing and external access vary by customer and legal regime.
28 U.S. Chamber of Commerce. (2025). Bad for business: The extraterritorial dimensions of the EU’s CS3D, pp. 2–6. https://www.uschamber.com/international/bad-for-business-the-extraterritorial-dimensions-of-the-eus-cs3d; U.S. Chamber of Commerce. (2024). Pathways to renewed growth: An American business perspective on the EU single market, p. 15. https://www.uschamber.com/assets/documents/EU-Competitiveness-2024-Full-Report.pdf. These sources characterise CS3D as extraterritorial and potentially conflicting with U.S. law, and the DMA, DSA and AI Act as onerous and, in some instances, discriminatory. Furchtgott-Roth (2025), p. 2, records the U.S. Commerce Secretariat’s statement that trade tools could be considered in response to unreasonable burdens. These are already seen as of July 2026 but for tariffs, but these are attributed U.S. policy positions, not neutral conclusions on the validity of EU law.
29 In re Caremark International Inc. Derivative Litigation, 698 A.2d 959, 971 (Del. Ch. 1996); Stone ex rel. AmSouth Bancorporation v. Ritter, 911 A.2d 362, 370 (Del. 2006); Marchand v. Barnhill, 212 A.3d 805, 821–824 (Del. 2019). These authorities frame oversight liability as a demanding bad-faith claim concerning the absence of a reasonable board-level information system or conscious disregard of warning signs, with particular attention in later cases to compliance risks central to the company’s business.
30 Enriques, Gatti & Shapira (2026), pp. 244–249, 265–276, 278–284 and 288–293. Under the two conventional branches of Caremark, plaintiffs may allege either a bad-faith failure to establish an effective board-level information system for central compliance risks or conscious disregard of sufficiently visible and actionable red flags. The authors argue that CS3D can make human-rights and environmental risks more prominent in board reporting and generate a stronger record of internal and external warnings. They further describe how Delaware litigation, discovery, legal advice and reputational effects may amplify the Brussels effect and expose U.S. companies to more searching governance scrutiny than European competitors. Federal securities claims based on inconsistent sustainability disclosures are a distinct route, analysed at pp. 274–276.
31 Regulation (EU) 2022/2560, art. 3. Tax credits, grants, loans, guarantees and other public benefits may fall within the broad concept of a foreign financial contribution, including benefits under U.S. federal or state industrial policy. Whether the contribution confers a selective benefit, constitutes a foreign subsidy and distorts the internal market is a separate question. For the wider transatlantic industrial-policy context of the IRA and CHIPS Act, see Calcara, A., & Schott, J. J. (2025), pp. 3–4. https://www.piie.com/sites/default/files/2025-04/pb25-3.pdf
32 Calcara & Schott (2025), pp. 3 and 7. The authors explain that the CHIPS Act generated less hostile European reaction than the IRA because both sides seek greater semiconductor-supply security, and that U.S. export controls may require differentiated technology and operational arrangements across U.S., European and China-facing businesses. Their paper does not analyse the Foreign Subsidies Regulation; that separate issue is addressed in note 30.
33 Burwell & Propp (2026), pp. 10–12 and 16–18. The report documents Europe’s dependence on U.S. cloud providers, concerns about access under U.S. law and the development of EU data-boundary and sovereign-cloud offerings. It supports the proposition that EU hosting, continuity and restrictions on external access are becoming procurement and product-design considerations. The exact technical controls—including key management, support arrangements and ring-fencing—depend on the applicable procurement specification or customer requirement.
34 Draghi, M. (2024). The future of European competitiveness: A competitiveness strategy for Europe, pp. 7 and 60; Draghi, M. (2024). The future of European competitiveness: In-depth analysis and recommendations, pp. 159–170. The report identifies fragmented demand, limited joint procurement, insufficient standardisation and non-EU dependencies as weaknesses in Europe’s defence-industrial base, and discusses EDIRPA, ASAP, EDIS and EDIP. On NATO’s continuing responsibility for collective defence, see NATO. (2022). NATO 2022 Strategic Concept, paras. 1 and 5. https://www.nato.int/content/dam/nato/webready/documents/publications-and-reports/strategic-concepts/2022/290622-strategic-concept.pdf.The EU policy examined here is principally industrial and financial. The implication that U.S. firms gain a strategic advantage by producing, maintaining, co-developing or partnering inside Europe is the authors’ inference from that policy direction.
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Academic and legal scholarship
Kokkoris, I. (2026). A spider’s web: Regulatory oversight and the interplay between EU merger control, foreign direct investment screening (EU and national), and the Foreign Subsidies Regulation. Yearbook of European Law. Advance online publication. https://doi.org/10.1093/yel/yeaf009
Mariotti, S. (2025). “Open strategic autonomy” as an industrial policy compass for EU competitiveness and growth: The good, the bad, or the ugly? Journal of Industrial and Business Economics, 52, 1–26. https://doi.org/10.1007/s40812-024-00327-y
Legal cases
Think-tank and economic-policy publications
Calcara, A., & Schott, J. J. (2025). Alignment or misalignment? U.S. and EU high-tech trade and sanctions policies toward China (Policy Brief 25-3). Peterson Institute for International Economics. https://www.piie.com/sites/default/files/2025-04/pb25-3.pdf
Furchtgott-Roth, H. (2025). The European Union’s CSRD and CS3D: The invisible threats to the United States. Hudson Institute. https://s3.us-east-1.amazonaws.com/media.hudson.org/100625_Furchtgott-Roth_EU_Regs_Memo.pdf
Professional and business analyses
U.S. Chamber of Commerce. (2024). Pathways to renewed growth: An American business perspective on the EU single market. https://www.uschamber.com/assets/documents/EU-Competitiveness-2024-Full-Report.pdf
U.S. Chamber of Commerce. (2025). Bad for business: The extraterritorial dimensions of the EU’s CS3D. https://www.uschamber.com/international/bad-for-business-the-extraterritorial-dimensions-of-the-eus-cs3d
Weil, Gotshal & Manges LLP. (2026). The EU Omnibus I Directive—Now in force. https://www.weil.com/-/media/files/pdfs/2026/march/the-omnibus-i-directive-now-in-force.pdf