Newly re-elected US President Trump is shaking up the world from Gaza to Ukraine, Greenland, Canada, Mexico, Panama and the EU. Is he being erratic and unpredictable? Definitely not, so far he is following his own tactics spelt out in Trump: The Art of the Deal. This book dates back to 1987 and is generally credited to Donald Trump and journalist Tony Schwartz. After reading it, little will surprise you. Chapter 2 is headed “Trump Cards”. Let’s review them.
Trump Cards:
According to Trump’s book, we should always think big, focus on the risks and maximize our options. Aim high, keep pushing for what you really want. The book recommends keeping a lot of balls in the air as most deals won’t work out, Also, have half a dozen options as backup to make each deal work. Don’t gamble, don’t play the slot machines, be the house that owns the slot machines. Know your market well by asking around and form your own decision. (Comment: This might explain why Trump rushed to meet newly released Israeli hostages). Have the leverage to make the other party want to do your deal.
Show respect, but never be intimidated. Have fun. Money is not a motivation for Trump apparently, it is a way of keeping score.
What else?
Trump says now that he wouldn’t have let the situations in Gaza and Ukraine happen on his watch. In his book, Trump spells out how he did specific deals e.g. building Trump Tower in New York. Among other things, he quietly oversees in advance the major preconditions for each big deal e.g. legal rights, design, team, finance and cost control. That way he is ready for later surprises…..
Trump and Global Tax:
On January 20, 2025 Trump returned to the White House. The same day he issued a series of executive orders. One “Presidential Action” on the OECD Global Tax Deal has sent the EU and other governments into a tailspin.
The Global Tax Deal refers to an OECD initiative also known as Pillar 2. This aims to make multinational groups with annual revenues over EUR 750m pay a minimum corporate income tax of 15% on their global profits. That includes profits parked offshore.
Around 140 countries are signed up to this. If one country doesn’t collect its share of this tax, there is an Under-Taxed Profits Rule (UTPR) which lets other participating countries enjoy the tax spoils instead – usually by denying an expense deduction for amounts sent offshore. Israel is only joining the party in 2026, so it is missing out on some 2024 and 2025 taxes.
The OECD estimates this should increase tax revenues by USD 155-192 billion globally each year.
What’s the problem? That’s obvious – most of the multinationals parking profits offshore are American. The US wants to collect its share of those tax revenues itself sooner or later.
What’s in Trump’s Presidential Tax Action?
According to the January 20 Presidential Action, the OECD Global Tax Deal supported under the Biden administration not only allows extraterritorial jurisdiction over American income but also limits the ability of the US to enact tax policies. Therefore, any commitments made by the Biden administration with respect to the Global Tax Deal will have no longer have force or effect within the US absent an act by Congress.
In addition, the US Treasury Secretary and US Trade Representative are required to investigate whether any foreign countries are not in compliance with any tax treaty with the United States or have any tax rules that are extraterritorial or disproportionately affect American companies. If so, Trump is to receive within 60 days a list of options for protective measures or other actions that the US may adopt….
Comment:
The above US Presidential Action relates to corporate income tax and also VAT. Moreover, the Trump administration is imposing higher tariffs (customs duties) on many imports. Investors and businesses around the world may soon find their after-tax returns are shrinking. If you don’t invest or do any business, you are still affected if you have a pension plan – they invest for us all.
So what does Trump tell us in The Art of The Deal and subsequently? Think big and have alternative options.
European governments have the chutzpah to tax US multinational groups while under-spending on defense – not an option. Ukraine’s President Zelenskyy is looking for more Trump cards. Israel has learned tech deterrence requires human backup. Time for better score-keeping.
But President Trump should prepare for publication delays if his next blockbuster is The Art Of The Peace Deal….
The writer is a certified public accountant and tax specialist at Harris Consulting & Tax
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