A decade ago, Mississippi’s economic momentum wasn’t a given. Today, we’re seeing the results of sustained effort by state leaders and partners focused on long-term growth. The Magnolia State is among the leading states in real GDP growth and wage growth, and has recorded one of the lowest unemployment rates since 2022. But what is perhaps the clearest indicator of the progress we’ve made is that our state has grown more in the last 5 years than in the previous 15.
None of this economic progress was a coincidence; it’s the result of years of hard work to reform our tax system, cut unnecessary red tape, and prioritize affordability. Under Governor Reeves, we’ve paved our own trail among the Gulf States, setting the stage for a promising economic outlook in the coming years. But now, as Governor Reeves looks to build on this momentum and close out his time in office with another two years of sustained growth, he’s facing a serious roadblock, not from state or even federal lawmakers, but from governing bodies over 4,700 miles away.
One might not think that decisions made in the European Union would have a direct impact on Mississippi’s business community, including small and medium-sized businesses, but the Corporate Sustainability Due Diligence Directive (CS3D) stands to do just that. Signed in 2024, but coming into force over the next few years, CS3D effectively transforms multinational ESG agreements into binding laws, enforceable by financial penalties and even private litigation.
Since its standards are applied not just to European companies but also to any company that reports over €450 million in annual EU revenue, it’s set to affect hundreds of U.S. companies, and its stringent compliance and reporting standards will reverberate throughout their supply chains.
The impact of forcing these extraterritorial standards on U.S. businesses will be significant. Even after changes made last year to make CS3D’s requirements less onerous, the policy is still expected to cost U.S. companies somewhere between $637 billion and nearly $1.1 trillion, roughly on par with the cumulative burden of all existing U.S. environmental and financial regulations combined. In Mississippi, that impact will be felt far and wide, with an estimated 6,600+ jobs lost, and economic growth slowed as businesses face higher compliance costs, delayed investment decisions, and fewer opportunities to expand.
There’s a reason that European countries once compared themselves to Mississippi. For many years, our negligible economic growth, driven by an outdated tax code and excessive red tape, kept us behind and made us the punchline of jokes about growth and competitiveness. But the economic momentum we’ve built through reform has made us the envy of the very same countries now seeking to impose their excessive, extraterritorial regulatory regime onto the companies driving it.
Mississippi’s business community already faces global competition on its most valuable exports, from energy to manufactured goods. Adding extraterritorial European mandates to help fill Brussels’ piggy bank puts them at a distinct disadvantage, especially for the small and mid-sized companies that lack the legal and compliance infrastructure needed to comply.
We must remind ourselves that Congress never authorized foreign regulators to set policy for American workers and markets. In fact, our very foundations have always opposed the notion of taxation without representation. Given that CS3D’s reach would expose us to just that, it’s time Congress stepped in to block this egregious overreach once and for all. Now is the time for Mississippi’s elected leaders to step forward and defend the freedom of American enterprise—our economic freedom, jobs, and long-term competitiveness depend on it.
The views expressed by contributors are their own and not the views of SuperTalk Mississippi Media.