Treasury and International Tax Issues

Waste, Fraud, and Abuse

The speaker commends the Secretary for work on rooting out waste, fraud, and abuse.
Treasury and Doge briefing showed unsexy work happened to address issues.
Example: IRS had over 100 licenses for software but only needed 2.
Character is what you do when no one's looking, same applies to government spending.
Appreciates line-by-line budget review to find unnecessary spending.
Taxpayer Advocate Service is a worthwhile investment to help constituents navigate the IRS bureaucracy.

Countries are implementing taxes targeting American companies.
Canada's digital services tax is estimated to bring in 2.5 billion dollars of revenue for Canada, with 2,300,000,000 from American companies.
UK, EU, and others are contemplating DSTs and UTPRs targeting American companies, pulling money from the US Treasury.
The Treasury Department has updated tools to fight these unfair taxes.
The best way to avoid these taxes is to not have unfair taxes in place.
The US does not use August as a negotiating tactic, but other countries pull substantial revenues out of the US treasury from US internet companies.
Digital service tax is especially egregious.
Canada is a close ally, but its digital service tax takes taxes retroactively.
The administration is pushing back on tariffs, non-tariff measures, currency manipulation, government subsidies, and unfair taxation.

China has plowed nearly 2,000,000,000,000 over the last four years into increasing factory production and construction.
These factories are doubling down on overcapacity.
Exports from China rose 13\% in 2023 and 17\% in 2024.
EU, Brazil, Indonesia, Thailand, and others have imposed tariffs on China to counter the flood of cheap imports.
China accounts for approximately 30\% of global manufacturing and is trying to go to 40\%, which is unsustainable.
The speaker warned allies that when the US put a tariff wall around China, goods would come ashore in Europe, Canada, and Australia.
Europe seeing substantial price deflation from China, especially in electric vehicles (EVs).
It's important not to have transshipment (goods moving from China to Vietnam to the US).
Portrait North America is important because the greatest opportunity for transshipment is via Mexico or Canada using USMCA.
US trade partners are responsive and have made good offers on this.