Business Groups Seek Trade Tax Fix

ByJohn S. McClenahen As the 15-nation European Union began enforcing sanctions on American products this week, two of Washington, D.C.'s most potent business groups were pushing Congress for remedial action. Several months ago, the World Trade Organization judged a part of the U.S. tax structure for multinational corporations to be in violation of international trade rules and authorized the EU to apply retaliatory tariffs. "These retaliatory tariffs will hurt U.S. exports to Europe at a time when . . . the global economy is showing signs of renewed strength. Moreover, these tariffs will negatively impact jobs of American workers," wrote Thomas J. Donohue, president and CEO of the U.S. Chamber of Commerce, in a letter sent to Capitol Hill. Meanwhile the National Association of Manufacturers has called on the lawmakers to quickly enact legislation replacing the U.S. extraterritorial tax program with a system that complies with WTO rules. "This is a critical moment for our economy. After several years of weak exports, foreign economies are showing strength and the U.S. dollar is moving back toward historical levels," noted Mike Baroody, NAM's executive vice president, on Mar. 2. "We are at long last beginning to see an increase in exports, and now this problem threatens to set us back."