The US has officially withdrawn from the Organisation for Economic Co-operation and Development’s (OECD) global tax deal brokered in 2021 by nearly 140 countries.

In a presidential memorandum issued shortly after taking office, US President Donald Trump declared that the global corporate minimum tax deal “has no force or effect” in the US.

Trump instructed the Treasury Secretary to notify the OECD that any commitments made by the previous administration regarding the deal would not be honoured unless Congress formally adopts its provisions.

“The OECD Global Tax Deal supported under the prior administration not only allows extraterritorial jurisdiction over American income but also limits our Nation’s ability to enact tax policies that serve the interests of American businesses and workers,” the memo said. 

Meanwhile, Trump also threatened to double tax rates for foreign nationals and companies in the US, the Financial Times reported.

According to reports, Trump is planning to impose a 10% tariff on Chinese-made goods entering the US as early as 1 February 2025. Additionally, he is said to be considering implementing similar tariffs on imports from the European Union.

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More than 140 countries had endorsed the OECD’s initiative, which was designed to combat tax avoidance by multinational corporations through two primary components.

Pillar One sought to redistribute excess profits of large multinationals to the markets where they earn revenue, while Pillar Two introduced a 15% global minimum corporate tax rate.

However, Trump alleged “discrimination” against American corporations by other nations, warning of potential retaliatory tax regimes that could harm US economic interests.

The memorandum also directed the US Treasury to prepare options for “protective measures” against countries that have implemented—or are likely to implement—tax rules that disproportionately impact American companies.

These measures could include retaliatory actions such as increasing tax rates for foreign nationals and businesses operating within the US.