G-7 Reaches Agreement to Exempt U.S. Multinationals from Minimum Tax

The G-7, a group of the seven largest economies in the world, reached an agreement on Saturday to exempt U.S. multinational companies from the 15% minimum tax that 130 countries committed to for companies earning more than 750 million euros.

The new pact fulfills a long-standing wish of Donald Trump, who announced upon returning to the White House his intention to withdraw the country from the agreement. The news was first reported on Thursday by Trump’s Treasury Secretary, Scott Bessent, who linked it to a last-minute tweak in the “big, beautiful law” launched by the U.S. government.

In exchange for the agreement with the G-7, whose last meeting took place last week in Canada, Bessent urged the U.S. Congress to eliminate the so-called “clause 889,” which authorized Washington to retaliate whenever it deemed that its companies were suffering from tax discrimination. For this, it reserved the right to impose “revenge taxes” on foreign investments.

The U.S. agreement with the G-7 significantly alters the scope of the 2021 pact, once considered historic but now may become diluted. At the time of its signing, it was seen as a major advance in establishing a global minimum tax aimed at combating tax evasion by multinationals.

“President Trump paved the way for this historic achievement [in Canada],” Bessent wrote on X about the recently secured exemption for his large companies. The Treasury Secretary then recalled that the U.S. president signed two executive orders on his first day in office requiring the Treasury to “defend the fiscal sovereignty of the United States.” “Thanks to his leadership, we now have a great agreement for the American people,” concluded Bessent.

The new tax method will provide “greater stability and certainty to the international tax system in the future,” says a joint statement released on Saturday by the seven major advanced economies of the world.

As part of the agreement, the other G-7 members commit to supporting the U.S. position in negotiations with the G-20 and the Organization for Economic Cooperation and Development (OECD). It was in the latter framework that the minimum tax pact for multinationals was signed four years ago. Mathias Cormann, Secretary-General of the OECD, called the G-7 statement on Saturday “an important milestone in international tax cooperation,” according to the Financial Times.

The agreement partially excludes “digital services taxes,” under which some countries tax the profits of U.S. tech companies, such as Meta, Apple, or Amazon. These levies led Trump to flare up on Friday, announcing he would suspend tariff negotiations with Canada.

Ottawa planned for a 3% tax on profits earned by these companies to take effect this Monday. “Obviously,” wrote the Republican president on Friday. “[With the plan to impose a so-called digital tax starting next Monday] they are imitating the European Union, which has done the same and is currently also in talks with us,” Trump wrote on his social network, Truth. In that post, he also indicated that “in the next seven days” he will inform Canada of what tariffs he intends to impose on imports crossing the northern border.