US President Donald Trump is shaking up the world, including Gaza, Ukraine, Greenland, Canada, Mexico, Panama, and the EU. Is he being erratic and unpredictable? Definitely not.
So far, he is following his own tactics spelled out in Trump: The Art of the Deal. This book dates back to 1987 and is generally credited to Trump and journalist Tony Schwartz. After reading it, little will surprise you. Chapter 2 is titled “Trump Cards.” Let’s review them.
Trump Cards
According to Trump’s book, we should always think big, focus on the risks, and maximize our options. Aim high, and keep pushing for what you really want.
The book recommends keeping a lot of balls in the air, as most deals won’t work out. Also, have half a dozen backup options to make each deal work. Don’t gamble, and don’t play the slot machines; instead, be the house that owns the slot machines.
Know your market well by asking around and arriving at your own decision. (Comment: This might explain why Trump rushed to meet newly released Israeli hostages.) Have the leverage to make the other party want to do your deal.
Show respect, but never be intimidated. Have fun. Money is not a motivation for Trump, apparently; it is a way of keeping score.
What else?
Trump now says he wouldn’t have let the situations in Gaza and Ukraine happen on his watch. In his book, Trump spells out how he did specific deals, e.g., building Trump Tower in New York.
Among other things, he quietly oversees in advance the major preconditions for each big deal, i.e., legal rights, design, team, finance, and cost control. That way, he will be ready for later surprises.
Trump and global tax
On January 20, Trump returned to the White House. The same day, he issued a series of executive orders. One “Presidential Action” on the OECD Global Tax Deal has sent the EU and other governments into a tailspin.
The Global Tax Deal refers to an OECD initiative also known as Pillar 2. This aims to make multinational groups with annual revenues over €750 million pay a minimum corporate income tax of 15% on their global profits. That includes profits parked offshore.
Around 140 countries are signed up to this. If one country doesn’t collect its share of this tax, there is an Under-Taxed Profits Rule (UTPR), which lets other participating countries enjoy the tax spoils instead – usually by denying an expense deduction for amounts sent offshore. Israel is only joining the party in 2026, so it is missing out on some 2024 and 2025 taxes.
The OECD estimates this should increase tax revenues by $155 billion to $192b. globally each year.
What’s the problem? That’s obvious: Most of the multinationals parking profits offshore are American. The US wants to collect its share of those tax revenues itself sooner or later.
What’s in Trump’s presidential tax action?
According to the January 20 presidential tax action, the OECD Global Tax Deal supported under the Biden administration not only allows extraterritorial jurisdiction over American income but also limits the ability of the US to enact tax policies.
Therefore, any commitments made by the Biden administration with respect to the Global Tax Deal will no longer have force or effect within the US absent an act by Congress.
In addition, the US Treasury Secretary and US trade representative are required to investigate whether any foreign countries are not in compliance with any tax treaty with the United States or have any tax rules that are extraterritorial or disproportionately affect American companies. If so, Trump is to receive within 60 days a list of options for protective measures or other actions that the US may adopt.
'Think big and have alternative options'
The above-mentioned US presidential tax action relates to corporate income tax and also VAT. Moreover, the Trump administration is imposing higher tariffs (customs duties) on many imports. Investors and businesses around the world may soon find their after-tax returns are shrinking. If you don’t invest or do any business, you are still affected if you have a pension plan; they invest for us all.
So what does Trump tell us in The Art of the Deal and subsequently? Think big and have alternative options.
European governments have the chutzpah to tax US multinational groups while under-spending on defense – not an option. Ukrainian President Volodymyr Zelensky is looking for more Trump cards. Israel has learned tech deterrence requires human backup. It’s time for better scorekeeping.
However, Trump should prepare for publication delays if his next blockbuster is “The Art of the Peace Deal.”
As always, consult experienced professional advisers at an early stage in specific cases.
The writer is a certified public accountant and tax specialist at Harris Consulting & Tax.