The US president threatened retaliatory measures against companies from countries that applied the top-up levy on corporation tax. The existing global minimum of 15%, a rate much lower than the legal minimum in most countries, was designed to disincentivize profit shifting by multinationals. Tax justice campaigners already considered this agreement – initially proposed by the US itself – to be too weak.

Now, by caving to Trump’s pressure, Canadian and European leaders have shown they are happy to sacrifice the interests of their own citizens, who desperately need the revenue to fund public services, to placate giant US corporations. US multinationals dodge twice as much tax as firms from other countries, funneling wealth away from their own workers and into the pockets of shareholders.

Meanwhile, Canada has now given in to Trump’s pressure over its Digital Services Tax proposal, which targeted tech giants, in order to reopen trade negotiations.

PSI General Secretary Daniel Bertossa said "Are G7 leaders really prepared to tear up global rules on the basis of Trump's latest whim or threat? They are giving a free pass to corporations and tax havens, all while public services across G7 countries remain woefully underfunded.

We already knew Trump was working on behalf of massive corporations. But to see the group of G7 leaders roll over on his command shows how corporate tyranny anywhere is a damage to democracy everywhere. What we need is a coordinated response from countries that support democracy, multilateralism and quality public services to stand up to Trump and global capital. Without that, he will continue to pick of each country for the next 4 years.”

When multinational companies are allowed to avoid their taxes, it is workers who pay the price, in cuts to public services, lower wages and fewer jobs, as wealth is stashed offshore and not productively reinvested, and through higher taxes levied on their incomes as governments seek to plug gaps in revenue.

Countries must defend their sovereign right to tax and resist pressure to grant grubby deals to foreign corporations. Instead, our leaders must start by insisting that all multinationals pay their fair share where economic activity takes place. A new tax convention is being negotiated at the United Nations. Governments should seize this opportunity to rewrite the global rules to protect states core function of raising revenue for the public good.