White House, Firms Win Key Concessions In Global Tax Deal

 

“WASHINGTON -- The Trump administration won international tax-policy concessions sought by Republicans and companies, reshaping the Biden-era global corporate minimum tax deal without abandoning it.

 

The U.S. had threatened to blow up the agreement last year, warning that it interfered with the nation's prerogative to set its own tax policy. That prompted other countries to seek a path that would accommodate concerns from President Trump and congressional Republicans.

 

The U.S. paused those threats in late June, then the administration stayed at the negotiating table for the rest of 2025 to reach the consensus announced Monday by the Organization for Economic Cooperation and Development.

 

The updated agreement achieves two main U.S. aims.

 

 First, it prevents other countries from imposing taxes on U.S. companies based on the idea that U.S. companies pay too little tax on their U.S. operations.

 

Second, it makes minimum-tax math more favorable to the U.S. research-and-development tax credit and similar incentives elsewhere.

 

Those changes should shield U.S. companies from taxes that would otherwise hit them, and foreign-owned companies won some reprieves, too.

 

Keeping the U.S. inside the global deal is important because it shows continued international commitment to keeping a floor under corporate tax rates, Manal Corwin, the lead OECD official in the effort, said in an interview Monday.

 

"This outcome is a far better outcome than one that would have involved threats of retaliation or countries doing their own thing," said Corwin, previously a senior Treasury Department official under then-President Barack Obama.

 

Monday's announcement advances the politically fraught project to prevent what officials described as a race to the bottom in corporate tax rates, where companies could shrink tax bills by booking profits in low-tax jurisdictions.

 

 Legal changes in the U.S. and elsewhere over the past decade have narrowed the gaps between countries' corporate tax rates. It is now harder -- but not impossible -- for companies to lower tax burdens with creative cross-border planning.

 

There are challenges ahead, and it is an open question whether the new system as updated Monday will prove to be administrable and durable.

 

Some countries will still try to use low tax rates, tax breaks and non-tax incentives to lure investment.

 

The U.S. imposed a minimum tax on U.S. companies' foreign income in the 2017 tax law, moving before others. In 2021, the Biden administration negotiated the global deal for a 15% minimum tax. It differed from the U.S. system, notably setting that rate floor on a country-by-country basis. It included enforcement rules that let countries impose taxes on companies whose home countries didn't fully adopt the new system -- including the U.S. That piece was scheduled to take effect in 2026.

 

The Biden administration was unable to persuade the then-Democratic Congress to build the global agreement into U.S. law. As Republicans gained power -- taking the House in 2023 and the White House and Senate in 2025 -- they pressed their objections to what they saw as an assault on U.S. tax sovereignty. After taking office, Trump, a Republican, criticized the deal and ordered up retaliatory measures.

 

While writing their tax law last year, House Republicans included a so-called revenge tax, known as Section 899, which would have raised taxes on many foreign-based companies. The idea upset markets and worried companies.

 

Faced with that threat, the G-7 countries committed to let the U.S. system run in parallel to the global minimum tax and the broader OECD began more negotiations.

 

The U.S. backed off the revenge tax before the final votes on the new tax law, but key lawmakers warned that they could revive it, a point reiterated Monday by the chairmen of Congress's tax-writing committees.

 

If other countries "delay or slow walk implementing their commitments into their domestic laws, Congress remains willing and able to take immediate action," said Sen. Mike Crapo (R., Idaho) and Rep. Jason Smith (R., Mo.).

 

U.S. business groups and Republicans cheered Monday's deal, while a coalition of nonprofits warned that it does nothing to boost U.S. corporate tax revenue.

 

"This deal will shield manufacturers from damaging taxes that unfairly stifle job creation in the U.S.," said Jay Timmons, president and CEO of the National Association of Manufacturers. "This deal is a massive triumph for manufacturers in the United States."

 

Treasury Secretary Scott Bessent called the agreement a "historic victory in preserving U.S. sovereignty and protecting American workers and businesses from extraterritorial overreach."

 

Monday's announcement is a significant win for U.S.-based companies, particularly high-profit-margin corporations that faced foreign minimum taxes on U.S. profits, said Jason Yen of accounting firm EY.

 

"Clearly, the 899 threat was quite effective in getting this across the finish line," said Yen, a former Treasury official.

 

The context of the threats mattered. Other countries are dealing with assertive U.S. moves across multiple fronts that might be more pressing -- including tariffs and national security -- and they can't push back on everything simultaneously. The agreement's language on complexity and incentives also help non-U.S. countries.

 

"This is a win for the U.S., but I think it's also a win for multilateralism," said Scott Levine of law firm Baker McKenzie, who was the Biden administration's chief negotiator on international taxes.

 

U.S. companies still face minimum taxes in many countries where they operate. Some countries might now lean more on those levies. Others, Yen said, might dial them back to attract investment from U.S. companies.” [1]

 

1. White House, Firms Win Key Concessions In Global Tax Deal. Rubin, Richard.  Wall Street Journal, Eastern edition; New York, N.Y.. 06 Jan 2026: A1.