The G7 statement suggests creating a a “side-by-side system” that excludes U.S. firms from minimum tax rules and “facilitate[s] further progress to stabilize the international tax system.”

The agreement comes as the EU and the U.S. are locked in high-stakes trade talks ahead of a July 9 deadline, when U.S. President Donald Trump has threatened to jack up tariffs on European goods to as high as 50 percent if no deal is reached.

In a sign of détente, the EU, Canada, Japan and the U.K. agreed to exempt the U.S. from applying the 15 percent minimum tax on multinationals in a bid to avert Washington’s countermeasures.

The minimum tax was a key plank of a deal, brokered by the Organization for Economic Cooperation and Development, that was agreed by almost 140 countries in 2021 to create a more fair global tax system. The U.S. Congress has never ratified that agreement.

In exchange for the exemption, the U.S. agreed to drop a so-called revenge tax against other countries that impose allegedly “discriminatory” levies on U.S. firms. U.S. policymakers came under intense pressure to ease the mooted tax amid fears that it would have dented foreign investment in the country.

“I have asked the Senate and House to remove the Section 899 protective measure from consideration in the One, Big, Beautiful Bill,” Treasury Secretary Scott Bessent wrote on X Thursday.