US businesses urge Trump to intervene over new EU consumer rules

US businesses have pleaded with the Trump administration to intervene over new EU consumer protection rules that they fear will leave them open to an avalanche of class-action lawsuits.

A group of five major US trade associations, led by the US Chamber of Commerce, wrote to top Trump administration officials earlier this year requesting “active engagement with the European Commission” over rules that would require companies to prove their products were not at fault if a customer alleged injury. 

The changes, due to be introduced from December as part of an update to the EU’s Product Liability Directive, threaten to become a new flashpoint in transatlantic relations. The Trump administration is already piling pressure on the bloc over a range of regulations, in particular its digital rules.

The lobby groups raised their concerns about the new consumer protection rules in a letter to US trade representative Jamieson Greer, expressing “significant concerns” about updates to the directive to include injuries caused by digital products.

“[It] creates substantial new costs and risks for American companies seeking to export innovative products and services to Europe,” they wrote in the letter, seen by the FT, urging Greer to “raise these concerns” with the EU Commission.

The US businesses said that Greer should consider requesting a “pause” in the implementation of the directive from the EU.

One business executive said US tech and pharmaceutical industries were most focused on lobbying against the new rules. But “this has an incredible impact on all sorts of US businesses operating over there [in Europe]”, the executive added.

The intervention comes at a delicate time in US-EU trade negotiations. Washington and Brussels are still trying to implement the 2025 Turnberry Agreement in which the EU cut import tariffs on American industrial and agricultural goods in return for a 15 per cent tariff on goods exported from the bloc to the US. Talks between EU and US trade negotiators to adopt the main parts of that deal failed to reach a conclusion on Wednesday night.

Trump blindsided European diplomats last week by abruptly threatening to boost car and truck tariffs back to the 25 per cent level they were at before the deal, which was struck at the US President’s Turnberry golf resort in Scotland last July.

Following a US Supreme Court ruling that struck down Trump’s original tariffs, Washington has launched several new probes into unfair trading practices by foreign governments. The US will be able to impose tariffs on a range of goods once those are complete.

In their letter, the US industry bodies warned that the revised Product Liability Directive would undermine “critical economic and strategic partnerships”.

Top of the US industry concerns — which have also been voiced by EU companies — is a decision to reverse the burden of proof so that claimants are presumed to have sustained injury unless manufacturers can prove their product was not responsible.

Kristen Kaufman, senior vice-president at the US Council for International Business, which represents more than 300 Fortune 500 companies and co-signed the letter, said the revision unfairly tipped the scales in favour of those seeking compensation, often via lawsuits funded by third parties.

“Take the situation where a patient is harmed by an AI-powered diagnostic tool. Under old rules, they had to prove that a defect caused injury, now the manufacturer has to show the product wasn’t defective rather than the victim prove it was,” she said.

Other revisions include expanding the scope of the directive to include digital products and related services, such as software updates.

The revisions to the directive are designed to level the playing field between victims and corporations but legal experts believe they will favour claimants. 

“New rules will make it easier for victims to prove that a product is defective,” wrote Julia Apostle, partner at Orrick, the international law firm, in an article explaining the effects of the changes.

The office of the US Trade Representative declined to comment. The European Commission did not immediately respond to a request for comment.