A proposed U.S. corporate tax reform would almost certainly contravene international trade rules if implemented, lawyers have said, risking the biggest dispute in the history of the World Trade Organization (WTO).
With signs growing that the United States may become more protectionist under President Donald Trump, European business groups said the tax plan — which could impose de facto import tariffs of up to 20 percent — raised the danger of a trade war.
Republican members of Congress are pushing to replace the existing tax on corporate income with one linked to turnover. This would allow firms to deduct their costs for purchasing goods and services produced in the United States, but would give no such deduction for purchases of imports.