Climate Change, Global Tax Emerge as Snags for G-20 Communique
Finance chiefs from the world’s 20 largest economies haggled over climate change and proposals for a global tax regime as they tried to draft a joint communique at a conference overshadowed by a viral outbreak that’s shaken the global economy.
Delegates at the G-20 meeting in Riyadh, Saudi Arabia, spent much of their time talking about a global slowdown exacerbated by the coronavirus outbreak, but struggled to come up with a united response, according to people familiar with the deliberations. Countries such as Japan, and institutions including the Organization for Cooperation and Economic Development, have been pushing for those with surpluses to spend more.
One of the main addressees of the calls for more spending is Germany. So far, the export-driven country has showed little interest in significantly boosting expenditures, arguing fiscal stimulus can’t bolster foreign demand.
On climate change, differences of opinion on display in the Saudi capital were more stark. The U.S., represented by Treasury Secretary Steven Mnuchin, objected to including a reference to the subject, according to three people familiar with the communique-drafting process. The Saudi delegation, which is hosting the event, didn’t show much enthusiasm for it either, according to one of them.
A Treasury spokeswoman didn’t reply to a request for comment.
As of Sunday morning in Riyadh, it was also looking unlikely that representatives would leave Saudi Arabia with any breakthroughs on a global taxation system that would apply to multi-national companies including tech giants like Alphabet Inc.’s Google and Facebook Inc., according to the people.
Europeans have balked at a U.S. proposal that new global rules should be a “safe harbor” regime. Mnuchin sought to reassure his counterpart by insisting such a system would not mean the rules would be optional, but Europeans said they still needed to fully assess the proposal.
If there’s no agreement, several European nations will go ahead with taxes on revenues of multinational digital firms. That could spark a transatlantic trade war as the U.S. says such measures are discriminatory and has already threatened France with tariffs.
In introducing a so-called global minimum tax — a measure intended to prevent large companies from shifting profits to low-tax locales to avoid paying them at home — the two sides are closer to compromise as there’s little difference among current corporate tax rates among major economies, and little concern that the minimum tax would be too low, one person said.
©2020 Bloomberg News
Visit Bloomberg News at www.bloomberg.com
Distributed by Tribune Content Agency, LLC.
In The News
WASHINGTON - House Democrats on Tuesday unveiled broad ocean-themed climate legislation, touting the world's oceans as underappreciated tools to combat rising temperatures. "Until today, ocean climate solutions have been mostly out of sight and out of mind in the U.S.," said Jane Lubchenco, who led the National Oceanic and Atmospheric Administration during the... Read More
SAN FRANCISCO — On Sept. 23, California Gov. Gavin Newsom announced an Executive Order banning the sale of gas-powered vehicles by 2035. California has served as a market leader in driving environmentally sensitive changes to the auto industry for decades. In his public statement, Newsom said... Read More
MIAMI — During a scouting mission to check on coral colonies in inshore Biscayne Bay last year, Caroline Dennison and a few other marine biology graduate students found something astounding: healthy populations of brain corals. There were no signs of white spots or bleaching and the... Read More
WASHINGTON -- Congressional Democrats used a hearing on climate change Thursday to advocate for pending clean energy bills that would revamp a big swath of federal regulations. Record-setting wildfires in western states and hurricanes along the Gulf Coast are adding to the fervor for aggressive environmental... Read More
MIAMI — A tropical depression traveling west through the Atlantic could strengthen into Tropical Storm Josephine this week, according to the National Hurricane Center. The depression is about 1,220 miles east-southeast of the Northern Leeward Islands and is traveling west with maximum sustained winds of 35... Read More
A federal court has ruled that California’s coordination with the Canadian province of Quebec to reduce greenhouse gas emission does not violate the U.S. Constitution, shooting down the last surviving element of a challenge by the Trump administration. In 2006, California’s Gov. Arnold Schwarzenegger signed a... Read More