Azernews.Az

U.S. President Donald Trump's corporate tax cuts could deliver a heavy blow to the UK economy, according to new economic modeling, Azernews reports.

The planned tax reductions by Trump could result in a loss of £18 billion for the UK economy.

During his election campaign, Trump pledged to significantly reduce the U.S. corporate tax rate and has already announced that the United States will withdraw from the Organization for Economic Co-operation and Development (OECD) minimum tax agreement. The aim of this agreement was to reduce tax competition among countries.

Currently, the corporate tax rate in the UK stands at 25%, which is considered high compared to other countries. According to an analysis by the Prosperity Institute, if the U.S. corporate tax rate is reduced to 14%, it could lead to a sharp decline in U.S. investments in the UK. The report states, "If the U.S. government lowers the corporate tax rate to 14%, one percentage point below the OECD minimum threshold of 15%, it would create an 11% tax differential between the U.S. and the UK. This could lead to a reduction of up to £18.2 billion in direct foreign investments from the U.S. to the UK by 2030-31."