G7 Grants US Exemption from Minimum Tax Amid Looming Tariff Deadline

The Group of Seven (G7) nations have reportedly agreed to exempt U.S. firms from new global minimum tax rules, a move aimed at de-escalating burgeoning trade tensions with the United States. This significant development comes as the European Union and the U.S. approach a critical July 9 deadline, with U.S. President Donald Trump having threatened substantial tariffs, potentially as high as 50 percent, on European goods if a trade agreement isn’t reached.

Under the proposed “side-by-side system,” U.S. companies would not be subject to the 15 percent minimum tax on multinationals. This tax was a cornerstone of a broader international tax deal brokered by the Organization for Economic Cooperation and Development (OECD) in 2021 and agreed upon by nearly 140 countries, though the U.S. Congress has notably never ratified the original agreement.

In a reciprocal gesture, Washington has committed to abandoning its planned “revenge tax” – a protective measure against countries imposing what it deemed “discriminatory” levies on American businesses. Treasury Secretary Scott Bessent confirmed the move, stating on X Thursday, “I have asked the Senate and House to remove the Section 899 protective measure from consideration in the One, Big, Beautiful Bill.” This exchange signals a potential détente, easing fears that the U.S. countermeasures would have deterred foreign investment.

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