G7 agrees to exempt US multinationals from global minimum tax
OTTAWA: The Group of Seven nations said Saturday they have agreed to exempt US multinational companies from a global minimum tax imposed by other countries -- a win for President Donald Trump's government, which pushed hard for the compromise.
The deal will see US companies benefit from a "side-by-side" solution under which they will only be taxed at home, on both domestic and foreign profits, the G7 said in a statement released by Canada, which holds the group's rotating presidency.
The agreement was reached in part due to "recently proposed changes to the US international tax system" included in Trump's signature domestic policy bill, which is still being debated in Congress, the statement said.
The side-by-side system could "provide greater stability and certainty in the international tax system moving forward," it added.
Nearly 140 countries struck a deal in 2021 to tax multinational companies, an agreement negotiated under the auspices of the Organisation for Economic Co-operation and Development (OECD).
That agreement, deeply criticised by Trump, includes two "pillars," the second of which sets a minimum global tax rate of 15 per cent.
The OECD must ultimately decide to exempt the US companies from that tax -- or not.
The G7 said it looked forward to "expeditiously reaching a solution that is acceptable and implementable to all."
On Thursday, US Treasury Secretary Scott Bessent had signaled that a "joint understanding among G7 countries that defends American interests" was in the works.
He also asked US lawmakers to "to remove the Section 899 protective measure from consideration in the One, Big, Beautiful Bill" -- Trump's policy mega-bill.
Section 899 has been dubbed a "revenge tax," allowing the government to impose levies on firms with foreign owners and on investors from countries deemed to impose unfair taxes on US businesses.
The clause sparked concern that it would inhibit foreign companies from investing in the United States. - AFP
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New Straits Times
44 minutes ago
- New Straits Times
Stronger ringgit, Fed shift could draw capital to Malaysia
KUALA LUMPUR: Malaysia could attract renewed capital inflows into its bond and equity markets, underpinned by a stronger ringgit and a possible shift in US monetary policy. UOB Kay Hian Wealth Advisors Sdn Bhd head of investment research Mohd Sedek Jantan said the appreciating ringgit enhances Malaysia's import purchasing power and may boost foreign interest in local financial assets. However, he cautioned that the scale and durability of these inflows would depend on macroeconomic fundamentals, monetary policy stance, and investor sentiment relative to regional peers. A Wall Street Journal report that US President Donald Trump is considering an early announcement of his nominee for the next Federal Reserve (Fed) chair has reverberated across global markets, with potential implications for Malaysia. "Markets are beginning to anticipate a shift in US monetary policy, potentially resulting in a weaker greenback against the ringgit. "At present, with the US Dollar Index (DXY) at 97.4 and the USD/MYR pair trading at approximately 4.225, the near-term trajectory of the ringgit is likely to hinge on the direction of US monetary policy," he told Bernama. DXY, which measures the US dollar against a basket of six major currencies, often influences global markets, including the ringgit's performance and Malaysia's export competitiveness. The ringgit has rebounded in recent days, rising from RM4.2948 per US dollar on June 23 to RM4.2327 on June 26, a 1.5 per cent gain. Trump, the Fed, and the Ringgit's Path Mohd Sedek noted that markets are aware of Trump's repeated criticism of Fed Chair Jerome Powell, particularly over delays in cutting interest rates. A new appointee is expected to align more closely with Trump's economic preferences, favouring earlier and more aggressive rate cuts to address inflationary pressures from trade policies, including reciprocal tariffs currently on hold until July 9, 2025. These tariffs have contributed to the Fed's cautious approach to easing. "Should the Fed implement a rate cut, potentially as early as September, with a 25 basis point reduction, the expected interest rate differential between the US and emerging markets would narrow, making non-dollar assets relatively more attractive. "This is consistent with uncovered interest rate parity, where lower US yields would reduce the incentive to hold dollar assets, thereby exerting downward pressure on the US dollar," he said. Mohd Sedek said a shift towards looser US monetary policy could also trigger a reallocation of global capital into higher-yielding emerging market assets, supporting currencies like the ringgit. This portfolio rebalancing could be further amplified if investor confidence improves in tandem with greater clarity from the Fed. "Under these conditions, an appreciation of the ringgit to around 4.15 is plausible, with potential for further gains. "While currency movements are inherently complex, shaped by both cyclical and structural forces, a scenario in which the ringgit trades below 4.15 by year-end is not implausible, particularly if global risk appetite remains favourable and Malaysia's macroeconomic fundamentals remain intact," he added. Exporters Seen Resilient Despite Ringgit Strength While the ringgit's gains have been modest, Mohd Sedek said Malaysia's export base is highly diversified and increasingly integrated within the region. A significant portion of exports to Asean, China and East Asia is denominated in local or regional currencies. In addition, the Malaysian government, working with regional partners, has been actively promoting local currency settlement mechanisms to reduce reliance on the US dollar. "This reduces the pass-through effect of MYR-USD fluctuations on trade competitiveness, particularly within Asia," he said. He added that Malaysia's key export sectors—such as semiconductors, palm oil, petrochemicals and machinery components—compete more on value-added, supply chain resilience and compliance standards than on pricing alone. This offers some protection from currency-induced pricing shifts. For example, high-tech electrical and electronic exports are typically less price-sensitive than commodity exports, allowing Malaysia to maintain market share despite ringgit strength. That said, he warned that policymakers should remain alert. If the ringgit strengthens too quickly or significantly, profit margins of small and medium-sized exporters and low-margin manufacturers could come under pressure. "However, this would warrant a targeted policy response — for example, fiscal support or foreign exchange risk management tools — rather than an immediate monetary recalibration. "The appropriate policy approach, therefore, is vigilant but not reactive, ensuring macro stability is not compromised in an attempt to micro-manage currency levels," he added.
The Star
an hour ago
- The Star
Usha Vance's new life in Trump's Washington
SHE has settled her three children into new schools, set up play dates and overseen the childproofing of her home. She takes the children to the second lady's office overlooking the Washington Monument, attends Mass with her family in the Virginia suburbs and hikes on wooded trails around Washington, the Secret Service in tow. She has a warm relationship with the president of the United States, who marvels over her academic credentials and tells her she is beautiful, a senior administration official said. She gets along with Melania Trump, the first lady, too. Less than a year ago, Usha Vance, onetime Democrat and the daughter of immigrants, was living a radically different life as a litigator for a progressive law firm while raising her children in Ohio. Many old friends are bewildered by her transformation. She may be the wife of the vice president, they say, but she must be appalled by the Trump administration's attacks on academia, law firms, judges, diversity programs and immigrants. Others say she likes the respite from her legal career and the glamour and influence of her new role. She always supported her husband's ambitions, they note, even if she did not necessarily share them. People close to the vice president, who went from being a vocal critic of now-President Donald Trump to his running mate, argue that Vance went on a similar but less public journey that soured her on the left. Either way, colleagues say, she is a model, at least for now, of a movement embraced by the White House and pushed by her husband that encourages women to have more children and celebrate the family as the centrepiece of American life. 'I think she's doing a great job as second lady of the United States,' Vice President JD Vance said in March in Bay City, Michigan, with Usha standing behind him. 'And here's the thing: Because the cameras are all on, anything that I say, no matter how crazy, Usha has to smile and laugh and celebrate it.' Online critics slammed the vice president for sexism. But those who know the couple say that no matter her silence in public, JD Vance leans on his wife's counsel in private. 'Her influence on her husband is incalculable,' said the senior Trump administration official, who has worked with Usha on and off for the past year and asked not to be named in order to speak freely. The official described the second lady as someone who has 'well considered' opinions on marriage, politics and faith, but holds herself at reserve. If Usha, 39, is not happy with all aspects of the Trump White House, friends say she would never let on. 'Her history and her upbringing suggest it,' the administration official said, 'but she's married to JD, and at some point you have to accept it.' When Vance became Trump's running mate in the summer of 2024, Usha quit her job and threw herself into the vice-presidential campaign. — EMILY ELCONIN/The New York Times The Vances have babysitters but no live-in nanny, and JD Vance leaves the West Wing many early evenings to have dinner with his family and help put the children to bed. The Vances have also taken their three children, now eight, five and three, on official international trips, including to Good Friday services at the Vatican and to dinner in New Delhi with the prime minister of India. Usha declined to be interviewed for this article. Only recently has she tiptoed out on her own and offered a glimpse of herself and the purpose she sees in her new role. On June 1, she announced on social platform X the 'Second Lady's 2025 Summer Reading Challenge' for children, driven by her view that reading is an antidote to modern distractions, including her own. From the start, back when they first met at Yale Law School, Usha has been her husband's guide to the elite and a cool salve for his hot temper. One friend of the couple said he would not be vice president without her. 'I'm one of those guys who really benefits from having sort of a powerful female voice over his left shoulder saying, 'Don't do that, do that,'' JD Vance told Megyn Kelly in 2020. For a long time it was his grandmother, Mamaw. 'Now it's Usha,' he said. Unlike JD Vance, whose roots are in a dysfunctional family of the white underclass captured in his bestselling memoir, Hillbilly Elegy , Usha is the eldest of two daughters of accomplished Indian immigrants, Krish and Lakshmi Chilukuri. They arrived in California in the early 1980s. The Chilukuris settled in Rancho Peñasquitos, a planned San Diego neighbourhood, where their home today is worth US$1.4mil (RM5.92mil). Vance's father, Krish, worked as an aerospace engineer at United Technologies and Collins Aerospace for 30 years and is now a lecturer at San Diego State. Lakshmi, Vance's mother, is a molecular biologist and the provost of Sixth College, an undergraduate school at the University of California, San Diego. Vance blazed her way through the local Mount Carmel High School, Yale College, a teaching fellowship in China and a prestigious Gates Foundation scholarship at the University of Cambridge in Britain. She wrote in the Gates scholars' yearbook that her interests were 'exploring urban neighbourhoods, cooking & green markets, long walks, panicking about law school.' Whatever worries she may have had, friends describe her as a picture of confidence when she was back at Yale in 2010 to start law school. She and JD Vance were soon assigned as partners on a major writing assignment. He was awestruck. 'She seemed some sort of genetic anomaly, a combination of every positive quality a human being should have: bright, hardworking, tall and beautiful,' he wrote in a widely quoted passage in Hillbilly Elegy. The feeling was not mutual at first. 'I think it's fair to say that JD was sort of the pedal in the relationship and I was a little bit of the brakes,' she told the crowd at the US.-India forum this month. 'Because I was sort of focused on the schooling part of it.' The two were married in 2014 in an outdoor wedding in Kentucky, near JD Vance's hometown, and spent the next decade crisscrossing the country. Along the way, Usha gave birth to Ewan in 2017, Vivek in 2020 and Mirabel in 2021. Usha clerked for Judge Brett Kavanaugh in the US Court of Appeals for the DC Circuit and for Chief Justice Roberts, and worked for the law firm Munger, Tolles & Olson in San Francisco and Washington. JD Vance became a partner in a venture capital fund co-founded by Peter Thiel, a Silicon Valley billionaire and major Trump supporter. In 2017, the couple moved to Cincinnati, where Usha Vance worked remotely for Munger. The couple bought a big US$1.4mil Victorian in East Walnut Hills, a liberal-leaning neighbourhood. Usha joined the board of the Cincinnati Symphony Orchestra and put Post-it notes on wine bottles to remind her husband which were the good ones to use for guests. A pivotal moment for Usha came in 2018, when Christine Blasey Ford accused Kavanaugh, by then a Supreme Court nominee, of sexually assaulting her at a high school party nearly 40 years earlier. Kavanaugh denied the accusation and was narrowly confirmed, but friends say that Usha was outraged by Democratic attacks on a man she admired. 'My wife worked for Kavanaugh, loved the guy – kind of a dork,' JD Vance told New York Times columnist Ross Douthat last year. 'Never believed these stories.' When Vance became Trump's running mate in the summer of 2024, Usha quit her job and threw herself into the vice-presidential campaign. She and the children were often on the trail with him, and colleagues say she was a key part of the preparations for his debate with Governor Tim Walz of Minnesota. Usha has largely stayed out of the fray over the administration's political and policy agenda, even as her husband has continued to be a polarising figure. The one exception for Usha was in March when she planned a trip to see a national dog sled race in Greenland, which Trump has said he wants to take over from Denmark. Vance made a cheerful video ahead of the trip, but it was ultimately downsized to a brief stop with her husband at a US military base after strong objections from Greenlanders. In the coming months, Vance says she will continue to roll out second lady projects. For now, she continues to take her children to her office in the Eisenhower Executive Office Building, the one with the view of the Washington Monument. — 2025 The New York Times Company This article originally appeared in The New York Times.
The Star
an hour ago
- The Star
Takeaways from Hard Fork's interview with OpenAI's Sam Altman
SAN FRANCISCO: Sam Altman, the chief executive of artificial intelligence company OpenAI, said Tuesday that he has had productive talks with US President Donald Trump about AI and credited him with understanding the geopolitical and economic importance of the technology. 'I think he really gets it,' Altman said. He added, 'I think he really understands the importance of leadership in this technology.' Altman, 40, made his remarks about Trump during a live interview in San Francisco with 'Hard Fork," the tech podcast from The New York Times. Over the 30-minute conversation, Altman and Brad Lightcap, OpenAI's chief operating officer, discussed AI's effect on jobs, the grab for technological talent by Meta's Mark Zuckerberg and regulatory and safety concerns about the fast-evolving and powerful technology. (The Times has sued OpenAI and its partner, Microsoft, accusing them of copyright infringement of news content related to AI systems. OpenAI and Microsoft have denied those claims.) Here are some of the takeaways. On Trump Altman has made it a point to forge a relationship with Trump. The day after the US president's inauguration in January, Altman stood behind Trump in the White House's Roosevelt Room as Trump announced a US$100bil (RM421.8bil) AI infrastructure deal, called Stargate, which was backed by OpenAI, SoftBank and Oracle. Trump described it as the 'largest AI infrastructure project by far in history.' On Tuesday, Altman said Trump understood AI and 'the potential for economic transformation, sort of geopolitical importance, the need to build a lot of infrastructure.' How AI Is Affecting Jobs Fears over how artificial intelligence could replace humans in jobs have loomed for years. More recently, there have been signs that some employers may be starting to use AI for entry-level jobs instead of hiring young graduates. Lightcap said he concurred with predictions that AI would change jobs. 'I think that there is going to be some sort of change,' he said. 'I think it's inevitable. I think every time you get a platform shift, you get the changing job market." Altman added that history suggested that better tools – in this case, artificial intelligence – would lead to more efficiency and people living richer lives. Regulatory and Safety Concerns Altman affirmed that there was a need to regulate AI but said it would be difficult to offer services if regulations varied by states. 'As these systems get quite powerful, we clearly need something,' he said. 'And I think something around the really risky capabilities and ideally something that can be quite adaptive and not like a law that survives 100 years.' His comments added to a debate over how governments should treat artificial intelligence. During the Biden administration, Altman and other tech executives said they believed in regulation of AI, though no laws were passed. Trump has taken a more laissez-faire attitude toward potentially regulating the technology. Lawmakers recently included a 10-year ban on AI regulation in Trump's domestic policy bill. 'I have become a bit more, jaded isn't the right word, but it's something in that direction, about the ability of policymakers to grapple with the speed of technology,' Altman said. The Fight for AI Talent Silicon Valley has been agog in recent weeks over how Meta, which owns Facebook, Instagram and WhatsApp, has been spending big to hire AI talent. Zuckerberg steered Meta's US$14.3bil (RM60.3bil) investment in the AI startup Scale AI and hired its 28-year-old chief executive, Alexandr Wang, to join a new lab that is pursuing 'superintelligence,' a theoretically powerful form of AI that could exceed the human brain. Zuckerberg has also dangled nine-figure pay packages to attract other technologists to Meta. In the interview with 'Hard Fork,' Altman seemed unbothered by the rivalry. When Lightcap was asked if he thought Zuckerberg really believed Meta would develop 'superintelligence' or if it was just a recruiting tactic, Lightcap replied, 'I think he believes he's superintelligent.' OpenAI's Relationship With Microsoft Microsoft is OpenAI's biggest investor, pumping billions of dollars into the AI company. But there have been reports since last year that the relationship between the companies has soured. 'Do you believe that, when you read those things?' Altman said in answer to questions about the relationship. He added that he had a 'super nice call' with Satya Nadella, Microsoft's chief executive, Monday and that they discussed their future of working together. 'Obviously in any deep partnership, there are points of tension, and we certainly have those,' Altman said. 'But on the whole, it's been like really wonderfully good for both companies.' – ©2025 The New York Times Company This article originally appeared in The New York Times.
