Business Leaders Lobby Against Trump's Section 899 Tax Proposal

On June 9, 2025, executives from approximately 70 leading global companies, including Shell, Toyota, and LVMH, convened in Washington, D.C., to lobby against Section 899 of President Donald Trump's proposed budget bill. This provision seeks to impose additional taxes on foreign investments from countries with tax policies deemed punitive by the United States.

Section 899 aims to levy a progressive tax of up to 20% on U.S. income derived by foreign investors from nations that have implemented tax measures considered detrimental by the U.S., such as digital services taxes. The provision is projected to generate $116 billion over the next decade.

Critics argue that Section 899 could deter foreign direct investment, disrupt financial markets, and jeopardize the 8.4 million American jobs provided by these international firms. The Global Business Alliance and the Institute of International Bankers are leading efforts to persuade lawmakers to modify or delay the measure.

Representative Ron Estes, who introduced the provision in 2023, stated, "Section 899 is a defensive measure, only activated in response to extraterritorial tax practices from other nations."

The introduction of Section 899 is seen as a response to international tax measures like the OECD's Pillar Two initiative, which includes the undertaxed profits rule (UTPR). Estes noted that the provision is designed to counteract foreign tax measures that could divert $120 billion from the U.S. Treasury over a decade.

Robert Cox, an economist, commented, "The new tax could benefit Europe by encouraging European investors to redirect their capital towards domestic ventures instead of the U.S."

The bill, projected to raise the national debt by $2.4 trillion, has also fueled political tensions, including a public feud between President Donald Trump and Elon Musk.

The debate over Section 899 underscores the complex interplay between tax policy, international relations, and economic strategy. As executives and policymakers engage in discussions, the outcomes will have significant implications for foreign investment, job security, and the broader U.S. economy.