*

Trump declares global tax deal has 'no force or effect' in

US

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Trump directs Treasury to identify 'protective measures'

on tax

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Memo warns US firms may face 'retaliatory' foreign tax

regimes

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Collapse of Pillar 1 talks may revive digital services

levies

(Updates throughout with memorandum language on protective

measures, details on global tax deal)

By David Lawder

Jan 20 (Reuters) - President Donald Trump on Monday

declared that a global corporate minimum tax deal "has no force

or effect" in the U.S., effectively pulling America out of the

landmark 2021 arrangement negotiated by the Biden administration

with nearly 140 countries.

Trump, in a presidential memorandum issued hours after

taking office, also ordered the U.S. Treasury to prepare options

for "protective measures" against countries that have - or are

likely to - put in place tax rules that disproportionately

affect American companies.

The European Union, Britain and other countries have adopted

the 15% global corporate minimum tax, but the U.S. Congress

never approved measures to bring the U.S. into compliance with

it. The U.S. has a roughly 10% global minimum tax, part of

Trump's landmark 2017 tax cut package approved by Republicans.

But countries that have adopted the 15% global minimum tax

may be in a position to collect a "top-up" tax from U.S.

companies paying a lower rate. Trump's memo referred to such

actions as "retaliatory."

"Because of the Global Tax Deal and other discriminatory

foreign tax practices, American companies may face retaliatory

international tax regimes if the United States does not comply

with foreign tax policy objectives," the memo reads.

"This memorandum recaptures our Nation's sovereignty and

economic competitiveness by clarifying that the Global Tax Deal

has no force or effect in the United States."

After years of stalled negotiations on global tax issues

hosted by the Paris based-Organization for Economic Cooperation

and Development (OECD) to end competitive reductions in

corporate tax rates, former U.S. Treasury Secretary Janet Yellen

agreed to the deal in October 2021.

Trump's Treasury nominee Scott Bessent said on Thursday that

following through with the global minimum tax deal would be a

"grave mistake."

Another part of the OECD negotiations were aimed at a new

arrangement to share taxing rights on large, profitable

multinational companies with countries where their products are

sold. The effort was aimed at replacing unilateral digital

services taxes that target largely American technology firms

from Meta Platforms' ( META ) Facebook to Apple ( AAPL ).

But these so-called "Pillar 1" talks have largely stalled,

and without U.S. participation, countries including Italy,

France, Britain Spain and Turkey may be tempted to reinstate

their digital taxes, risking retaliatory tariffs from

Washington.