UK’s Man in Washington Reveals Covert Push to Kill ‘Revenge Tax’

The British government embarked on an intense behind-the-scenes effort to lobby Capitol Hill and the Trump administration to remove the so-called “revenge tax” from the GOP tax megabill.

The high-stakes push, detailed by British Ambassador Lord Peter Mandelson during an exclusive roundtable interview with Bloomberg Government, offers a rare view of how to influence Congress — and the White House — in President Donald Trump’s Washington.

Mandelson held meetings with Ways and Means Committee members and Senate Republicans to emphasize the UK’s investment concerns with the Section 899, as it’s formally known, before the provision was ultimately dropped as part of a broader deal on global tax, he said this week.

The Senate, Mandelson said, was decisive in removing the tax, with key Republicans in the chamber sharing their concerns with Trump and other administration officials.

“Our lobbying was intensive on the Hill,” Mandelson said. “We wanted the president to hear from enough Republican Senators he respects that they were unsure about this.

“I also went to the Ways and Means Committee and explained to them very clearly what we thought would be the consequences, and that is a potential loss of investment in the United States.” Mandelson said the private meeting included a “very frank conversation”, before adding “that wasn’t the decisive thing, the decisive thing was in the Senate.”

In his meetings with lawmakers, Mandelson said he underscored the “direct threat to the British international businesses investing in the United States,” but also the threat the measure posed to the US “as an investable country.”

Removing Section 899 was also a top priority for business lobbying interests, especially finance firms on Wall Street and multinational companies. It would have hiked taxes substantially on foreign-owned companies in the US should their home countries impose extraterritorial or discriminatory taxes on American businesses.

J.P. Freire, a Ways and Means spokesperson, said in a statement to BGOV that the provision “clearly had its intended effect as foreign governments quickly embraced a negotiated agreement with the US Treasury Department rather than face it.”

The Senate Finance Committee did not comment on the British push against the provision. A spokesperson for Senate Finance Committee Chair Mike Crapo (R-Idaho) referred to the senator’s June 26 statement with Ways and Means Committee Chair Jason Smith (R-Mo.) agreeing to the removal of Section 899 from the bill.

Mandelson, a fixture in British politics who knows his way around an influence campaign, also spoke about direct dealings with Trump and his inner circle.

“With the Trump administration, there are fewer people, the process exists, you’re not frozen out of it,” he said. “You know that there are four or five key principals who are going to be in on all the decisions, each of them seems to know what the other thinks, and in particular, they know when the President has made up his mind. But you can talk.”

Mandelson’s comments to Bloomberg Government came about two weeks after the Canadian Finance Ministry released a statement on an “understanding” between the G7 countries that American companies would be exempt from two key rules in the global minimum tax framework.

In exchange, the Trump administration agreed to ask Congress to remove Section 899 from the sweeping tax-and-spending cuts bill.

The global minimum tax, which is part of a larger international tax pact agreed to at the Organization for Economic Cooperation and Development, seeks to impose a 15% minimum tax on multinational companies in every country where they operate.

But Republicans have slammed the framework, which was largely negotiated under the Biden administration, for years. Section 899 was introduced as a tool the Trump administration could leverage while negotiating its position at the OECD.

Business lobbyists who worked for the removal of Section 899 from the megabill said the G7 deal was pivotal in getting it out.

Jonathan Samford, president and CEO of the Global Business Alliance, said 899 removal was a top priority for his group. “We were extremely pleased that members of the G7 were able to agree to a framework that allowed the Senate and congressional leadership generally to remove this provision,” he said.