(Bloomberg) – US Treasury Secretary Janet Yellen made the case for a harmonized corporate tax rate in the world’s major economies, part of an effort to restore global leadership and credibility with US allies. America after the unilateralist approach of the Trump era.
In her first major speech on international economic policy, Yellen marked her country’s return to the “global scene.” He singled out China, saying the US needs a “strong presence in global markets” to level the playing field.
“USA. first should never mean America alone, ”he said Monday at a conference ahead of the spring meetings of the International Monetary Fund and the World Bank. “The lack of leadership and global commitment makes our institutions and our economy vulnerable.”
Yellen criticized President Donald Trump’s strategy, condemning the four years that the US “isolated itself and withdrew from the international order that we created.”
The new multilateral approach begins with the US taking a leadership role in working with the Group of 20 countries to find an appropriate minimum corporate tax. Yellen wants to stop what he described as an “international race to the bottom” by countries competing to attract companies with lower taxes.
The US is involved in talks led by the Organization for Economic Cooperation and Development with about 140 countries to develop a global agreement on minimum taxes, but the participants have yet to reach an agreement.
Yellen participates in her first round of meetings as Treasury secretary during the spring meetings of the IMF and World Bank, held virtually this year.
The head of the Treasury also called on other major economies “to continue making a strong fiscal effort and avoid withdrawing support too soon, to promote a strong recovery and help prevent the emergence of global imbalances.”
He highlighted the Biden Administration’s plans for sustained financial support, with a $ 2.25 trillion infrastructure plan following the $ 1.9 trillion pandemic relief bill signed last month.
Yellen’s speech demonstrates a radical change. “Credibility abroad begins with credibility at home,” he said Monday. Yellen also stated that the US would lead a fight against global poverty, beginning with efforts to eradicate COVID-19 in developing countries and helping their economies recover from the pandemic. And again he pointed out that the goal is not only aligned with American values, but also with its interests.
Yellen said that not helping the poorest countries overcome the pandemic “would be a profound economic tragedy.” “What is less obvious, but equally true, is that this divergence would also be a problem for the US,” he added. “With few exceptions, stable and prosperous economies tend to be less of a threat to US security.”
Original Note: Yellen Declares End to Trump’s Global Retreat, Eyes Tax Deal (1)
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