The Trump Tax Reform Plan: Implications for Europe

The Republican majority in Congress and President Trump have advanced several proposals for reforming the US tax system. The details vary, and that variation has significant implications for European foreign direct investment (FDI) into the United States and for US FDI into the European Union. Under the House Blueprint, the United States will become (from an EU tax perspective) the world’s largest corporate tax haven, leading to an increase in EU direct investment into the United States. Under the Trump Plan, there will be additional incentives for US multinationals to shift profits to Europe. This article discusses similarities and differences between the House Blueprint and Trump Plan, and their implications for FDI.