G7 hasty cave in would finally pronounce global tax deal dead

The US Treasury Secretary signalled on Thursday that a deal is forthcoming among G7 nations allowing US companies to be excluded from the proposed global minimum tax on multinational corporations.¹ If agreed by the OECD, the concession from G7 countries would block countries from applying the proposed top-up tax on multinational corporations whose headquarters are based in the US.

Under the pretence that the US had broadly equivalent domestic policies to the minimum tax in place, this would in effect result in preserving the enormous extraterritorial tax privileges US multinationals enjoy to this day because of their aggressive tax abuse practices. A global bifurcated and unlevel economic playing field would become entrenched and legalised even among G7 countries, where hitherto at least on paper the same international tax rules have applied for all corporations.

Markus Meinzer, director of policy at the Tax Justice Network, said:

“The zombie tax deal was dead in the water from day one, but its years-delayed pronouncement might finally be here. Like with much of global tax rules, the US is trying to exempt itself by arm-twisting others, which would make the tax deal entirely useless. A ship with a US-sized hole in its hull won’t float.

“It would be hasty of G7 countries to surrender their tax rights to the US because it’s looking like Trump might not be able to hold countries at economic gunpoint much longer. The US Treasury called on Trump yesterday to rescind his proposed “revenge tax” to undo the damage done to the US economy by his aggressive misuse of tax policy.² As the US Commerce Department’s data showed yesterday, the US economy shrunk worse than thought under Trump’s emperor-like attitude to international tax cooperation.³

“Most countries saw this coming years ago, which is why they’re currently working on establishing a UN tax convention, where no one country can ransom the rest of the world against making progress. What doomed the zombie deal was the way it was negotiated, behind closed doors and by a small club of rich countries. This didn’t just result in a veto power for the US but contorted the proposal into a perverse rewards programme for the richest tax havens like Switzerland, harming global South countries even more.⁴ The UN tax talks are the antidote to this in every way, requiring negotiations to be done transparently, democratically and with the inclusion of all countries.

“G7 countries are among the last handful of holdouts opposing the UN tax convention. They face a choice now: tax sovereignty at the UN or tax subjugation under Trump. If today’s reports are true, they’ll be choosing subjugation. But calls are stronger than ever for a new economic coalition of the willing to confront extreme wealth and the authoritarianism it brews.⁵ We urge the other G7 countries to join the work at the UN to reclaim tax as a tool for people, economies and planet.”

-ENDS-

Notes to Editor

1. More on the news from the US Treasury in the FT here.
2. See FT article in note 1 for more information. The “revenge tax” refers to the Section 899 provision in Trump’s “big, beautiful” budget
3. The US Commerce Department reported yesterday (26 June 2025) that the country’s gross domestic product fell at an annual rate of 0.5% from January through March. The agency’s initial first-quarter GDP report, issued in April, estimated a 0.3% decline, which was later revised to a 0.2% dip in its second print. Yesterday’s data shows the US economy shrank faster than previously thought during the first three months of 2025, with growth contracting for the first time in three years. See this CBS article for more information.
4. More information on how the global tax deal has been turned into a tax haven reward programme here.
5. Ex-world leaders called yesterday (26 June 2025) for a new economic coalition of the willing to confront extreme inequality.