Tax News & Views International Weekly: Out at the United Nations

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With President Donald Trump’s dramatic actions to shake up the federal bureaucracy in his first weeks in office, one move may escape notice. And it’s hardly surprising. But it could be important as the global tax landscape enters a particularly chaotic and unpredictable period.

The United States announced at the United Nations on Monday that it would not participate in ongoing discussions over a new U.N. tax convention, with Jonathan Shrier, acting U.S. representative to the U.N. Economic and Social Council, calling it an “unwelcome overreach” into national tax sovereignty. It’s not the first time the U.S. has expressed discomfort with the negotiations, which aim to create a new global tax framework focused on developing country needs, to potentially compete with that promoted by the Organization for Economic Cooperation and Development. But walking out entirely is a new level of opposition, which calls into question whether the framework would ever be followed.

Of course, the discussions will keep going, with or without the U.S. And non-governmental organizations supporting the effort seem more than happy to continue without U.S. input. As the Trump administration also heightens opposition to the OECD’s Two-Pillar project through executive orders–and with many Republicans pushing for the U.S. to exit the OECD entirely–the legitimacy of both of these organizations’ tax rules could be in jeopardy. If developing countries see this as a chance to come together and press for their priorities, it could change the dynamics of the long-simmering OECD/UN rivalry.

The new tariff world

 Trump backed down, for now, on promised 25% tariffs against products from Canada and Mexico, after those countries’ leaders promised new border enforcement measures. But the prospect of those levies going into action–as well as the 10% tariffs on China, which did go into effect–have massive implications for multinational entities.

Some stories about how businesses are responding:

Trump Partially Delays Tariff Implementation - Michael Smith, Tax Notes ($)

Tax Execs Plot Response to Fallout from Trump's Trade Threats – Lauren Vella, Bloomberg Tax ($)

Exit Interviews

Scott Levine, until recently the deputy assistant secretary of international tax policy at the U.S. Treasury Department, spoke to both Tax Notes and Bloomberg Tax after leaving office. All eyes in the international tax world are waiting to see who will be his replacement, which will be a major indication of how the administration will approach the OECD. He expressed hope that the OECD Two-Pillar project could continue, despite the recent U.S. actions.

Other Notable International Items:

ESG Irony: Why Corporate Tax Avoidance Must Be Considered - Tax Notes ($). Reuven Avi-Yonah, professor and director of the University of Michigan’s international tax program, argues that corporate tax avoidance should be a factor in environmental, social and governance” (ESG) investing.

Trump Executive Orders Bring U.S. Course Change on International Tax -Tax Notes ($). Mindy Herzfeld, professor at the University of Florida and regular Tax Notes contributor, on Trump’s international tax executive orders.

External Revenue Service Could Help Solve Unpaid Duty Issue - Law360 Tax Authority ($). Dylan Moroses at Law360 on how Trump’s proposed “External Revenue Service” could actually ease some difficulties with cross-border transactions, even as it collects new revenue. 

Cato Tax Bootcamp: An International Tax Primer - Liberty Taxed: A Blog on U.S. Tax Policy. Adam Michel, director of tax policy studies at the libertarian Cato Institute, with an overview of the international tax system, including different approaches and goals.