Donald Trump’s proposed corporate tax cuts could cost the British economy £18 billion, according to new analysis from the Prosperity Institute.
The former US president’s plans to slash corporation tax rates threaten to divert American investment away from the UK, where business tax remains at 25 per cent.
Economic modelling suggests that if Trump reduces US corporate tax to 14 per cent – one point below the OECD minimum rate – it could rapidly diminish American investment flows into Britain.
During the US election campaign, Trump pledged to cut the corporate tax rate to at least 15 per cent.
This would mark a significant reduction from the current 21 per cent rate established under Joe Biden’s administration.
Trump has already distanced himself from the OECD’s minimum tax deal, which was designed to prevent aggressive tax competition between nations.
Donald TrumpREUTERSIn its analysis, the Prosperity Institute said: “If the United States government cuts US corporate tax to 14 per cent – one point below the OECD’s minimum threshold of 15 per cent – this would give the United States an 11 per cent tax differential over the UK, whose corporate tax rate is currently 25 per cent.
“We predict a reduction of up to £18.2 billion in foreign direct investment from the USA to the British economy between now and 2030-31.”
This gap could prompt American businesses to redirect their investments back to the United States, potentially undermining Britain’s position as a key…
