Top Treasury officials are secretly negotiating with GOP senators over Section 899 of the proposed budget bill, which is forcing foreign countries to the negotiating table. The provision has sparked criticism from both sides, with some Republicans calling it a “revenge tax” aimed at penalizing countries that impose taxes on US companies.
However, the Trump administration sees Section 899 as an important tool to negotiate better deals for American multinational corporations, similar to tariffs. Some Republican senators, including Sen. Thom Tillis (R-N.C.), have expressed reservations about the provision.
The original outline of a global minimum corporate tax was included in President Biden’s Inflation Reduction Act but required foreign countries to come to a common agreement on how to tax multinational corporations. Republicans argued that this process usurped Congress’ constitutional power and had policy concerns with a global minimum tax.
Section 899, however, allows the US to increase tax rates for foreign direct investment on countries it claims have unfair tax policies. There is some indication that European countries may be open to modifying their policies to mollify the Trump administration.
A coalition of trade associations has written to Senate Majority Leader John Thune (R-S.D.) and Senate Finance Committee Chair Mike Crapo (R-Idaho) calling for the removal of the provision, citing concerns about undermining American jobs, innovation, and long-term economic growth.
The Trump administration is also signaling a willingness to make changes to Section 899 but maintaining its importance in negotiating better deals for American corporations. The provision is seen as a way to keep other nations “in check” and has sparked concern among Wall Street investors that it could deter overseas investment.
The signature legislation, which President Trump calls the “one big beautiful bill,” has crossed a key hurdle but faces challenges in achieving its pro-growth effects.
Source: https://www.axios.com/2025/06/06/trump-budget-section-899-revenge-tax