Philip Hammond joins EU states to warn against Donald Trump tax plans
2 min read
Philip Hammond has joined forces with European counterparts to warn Donald Trump he could start a trade war with his raft of planned tax changes.
Top finance ministers from France, Germany, Italy and Spain have joined Britain to sign a complaint letter about the plans to the US Treasury.
It notes “significant concerns” that the measures could have “a major distortive impact on international trade” and break both World Trade Organisation rules and guidelines written by the US itself.
Mr Hammond is concerned about a proposed corporation tax cut from 20% to 12.5% on income derived from exported goods, among other things, according to the Daily Telegraph.
Another proposal by the US president would lower the corporation tax in the states from 35% to 20%.
The letter to US Secretary of the Treasury Steven Mnuchin, says: "It is important that the US government’s rights over domestic tax policy be exercised in a way that adheres with international obligations to which it has signed up.
“The inclusion of certain less conventional international tax provisions could contravene the US’s double taxation treaties and may risk having a major distortive impact on international trade.
"We would therefore like to draw your attention to some features of the proposals being discussed that cause significant concerns from a European perspective."
A Government source told the paper: "The fact that there is a co-ordinated cross-country effort shows the level of concern there is about this."
And a US Treasury spokesman said: "We appreciate the views of the finance ministers. We are closely working with Congress as they finalise the legislation through the conference process."
Mr Hammond’s decision to sign the letter could be seen as a risky move as Britain prepares to leave the EU and is hoping to sign a free trade deal with the US.
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