Business lobbyists are working overtime to kill a measure in the GOP tax bill that would allow foreign companies to collect additional taxes from American technology companies, The New York Times reported Monday.
The provision is buried in the GOP's "One Big Beautiful Bill Act." It would effectively impose a revenge tax of up to 20% on companies headquartered in “discriminatory foreign countries” with “unfair foreign taxes.” It would also punish foreign companies that attempt to abide by the 2021 global minimum tax agreement, which set a 15% minimum tax on cross-border profits generated by large corporations.
Critics say it will disincentivize foreign direct investment at a time when the United States needs it. The GOP's budget would cut billions in domestic spending and taxes, meaning the government would need to find new revenue streams to support its operations.
“Trump wants onshoring, and now if we’re going to penalize people who are doing the onshoring or the foreign direct investment in the U.S., it’s counter to his goal,” Dan Schneider, deputy head of U.S. policy at Piper Sandler, told the Times.
Trump took aim at the 2021 global minimum tax agreement shortly after taking office. On Jan. 20, Trump announced his “Fair and Reciprocal Plan” on Trade, which directed U.S. Treasury Secretary Scott Bessent to investigate foreign digital services taxes.
Since the 2021 agreement was signed, the United States has collected more than $100 billion in taxes from foreign corporations. An analysis by the nonpartisan Tax Foundation found that the GOP measure would raise taxes on countries that comprise almost 80% of the taxes the United States collects from foreign direct investment.
Backing away from the agreement could also lead to the loss of up to 700,000 U.S. jobs, according to The Global Business Alliance, a trade organization representing some of the largest global brands like Unilever, L’Oréal USA, and Michelin.