America News Agency

A provision in Trump’s One Big Beautiful Bill Act would allow the US to impose higher taxes on foreign individuals, businesses, and investors connected with jurisdictions that apply “unjust foreign taxes” on US citizens and companies.

Section 899 classifies digital service taxes and "directed profit taxes" as unfair when targeting US entities. It allows US agencies to impose an extra tax starting at 5%, rising by 5 points annually up to 20%.

Max Yoeli, senior fellow with the US & Americas programme at Chatham House, says Section 899 “threatens to further alienate foreign investors.”

Italian bank UniCredit admits that Section 899 could further erode foreign investor sentiment in US dollar–denominated assets. Given the large amount of local assets held by foreigners, this could backfire on the US.

UniCredit told clients: “The list of jurisdictions covered is lengthy and includes most European countries, including Italy and Germany,” noting that foreign investors have more than doubled their holdings in US assets over the past decade.

UniCredit also warns that, if new tax disputes arise between the US and other countries, the dollar’s safe‑haven status could be undermined.

The bill passed the House last month; the Senate has not yet approved it, and the White House set a July 4 deadline.

Goldman Sachs calculates that UK-listed companies are “particularly exposed” to Section 899, since around 30% of FTSE 100 revenues come from the US.

But companies with majority ownership by US shareholders are exempt, so City firms may consider shifting their listings to New York to avoid Section 899.

Goldman Sachs analysts say: “This ownership structure not only reduces tax risk but also strengthens the strategic rationale for re‑listing in the US, where investor bases are deeper and better aligned with US revenue exposure.”