US President Donald Trump has announced that the global corporate minimum tax agreement brokered in 2021 under the Biden administration “has no force or effect” in the United States, signaling a withdrawal from the landmark international tax deal.
In a presidential memorandum issued hours after his inauguration, Trump directed the US Treasury to develop “protective measures” against countries that implement tax rules targeting American companies.
The 15% global corporate minimum tax, designed to prevent multinational corporations from exploiting tax havens, has been adopted by the European Union, Britain, and nearly 140 other nations. However, the US Congress never ratified legislation to align domestic tax policy with the agreement.
US Rejects Global Framework
Trump’s memorandum underscores his administration’s rejection of the agreement, stating that it undermines US sovereignty and economic competitiveness.
“Because of the Global Tax Deal and other discriminatory foreign tax practices, American companies may face retaliatory international tax regimes if the US does not comply with foreign tax policy objectives,” the memo reads.
The United States currently imposes a global minimum tax of approximately 10%, introduced as part of Trump’s 2017 tax overhaul. Under the global deal, other countries could impose “top-up” taxes on US companies to meet the 15% threshold. Trump’s memorandum referred to such measures as “retaliatory.”
Backdrop of Global Tax Negotiations
The global tax deal, negotiated through the Paris-based Organization for Economic Co-operation and Development (OECD), sought to curb tax competition by setting a global minimum rate. It also aimed to redistribute taxing rights on large multinationals to countries where their products are sold, addressing unilateral digital services taxes targeting American tech giants like Meta and Apple.
Without US participation, countries such as France, Italy, and Britain may reinstate digital taxes, potentially provoking retaliatory tariffs from Washington.
International Reaction
Ireland, a signatory to the 2021 OECD agreement, expressed concerns over Trump’s decision.
“Our long-standing position has always been that the international tax system needs to keep pace with how business is conducted globally,” a spokesperson for Ireland’s Department of Finance said. “Continued cooperation and progress on these issues will be necessary to avoid fragmentation and bring much-needed stability to the international tax landscape.”
Irish officials said they would monitor developments closely, calling for constructive engagement among OECD member countries to address the challenges posed by the US withdrawal.
Challenges Ahead
Trump’s Treasury Secretary nominee, Scott Bessent, had earlier criticized the global tax deal, calling its implementation a “grave mistake.” The administration’s stance raises concerns about renewed tensions in global tax policy, as countries reassess their approaches to digital taxes and international corporate taxation frameworks.
With the US now stepping away from the agreement, the international tax system faces heightened uncertainty, potentially jeopardizing years of multilateral efforts to create a cohesive framework.
