A recent study revealed extensive operations to transfer corporate profits from Europe to the United States of America, benefiting from tax cuts and incentives approved by Washington over the past years. According to the study, major American companies transferred a large portion of their profits made in European markets to the United States to benefit from lower tax rates.
The study indicated that these practices deprived European Union countries of billions of euros in tax revenues, as multinational companies continue to exploit existing loopholes in the international tax system. This has sparked increasing criticism of mechanisms that allow profits to be transferred to low-tax destinations, even though they are actually achieved in other markets.
Under the global minimum tax arrangement, US multinational corporations can pay taxes on their profits earned in Europe in the United States as well. The study says that this mechanism allowed American companies to pay less taxes, while the tax reduction policy adopted by US President Donald Trump succeeded in attracting billions that could have flowed into the coffers of European countries, including Germany.
According to the study prepared by the “Tax Justice” network and commissioned by the head of the Left Bloc in the European Parliament, Martin Scherdivan, and viewed by the German Press Editorial Network, Germany incurred tax losses exceeding 23 billion euros between 2016 and 2023, making it the country most affected within the European Union by American tax policy during that period.
German losses were distributed at various levels of public administration, as municipalities lost about 9.8 billion euros in tax revenue, while the federal government’s losses amounted to 6.9 billion euros, compared to about 6.7 billion euros for state governments.
The Trump administration had reduced corporate taxes and provided incentives to record profits within the United States instead of Europe. As a result, according to the study, American companies transferred profits worth 327 billion euros from European Union countries to the United States during that period, even though these profits were achieved within European markets, according to a report published on the website of the private German channel NTV.
The study concluded that “public budgets in Europe lost tax revenues of no less than 86.4 billion euros” as a result of these transfers. However, this policy did not increase US tax revenues. Although American companies announced profits in the United States in 2024 equivalent to double what they announced in 2016, the total taxes they paid were less than those recorded in 2016.
The German Editorial Network quoted Martin Scherdivan as saying that Donald Trump is working "systematically to transform the United States into a low-tax haven that serves technology giants and his billionaire friends like Musk, Zuckerberg and Bezos."
He added that major companies such as Google and Meta move their profits to the United States to benefit from lower tax rates, while European public budgets and municipalities lose important financial resources. Sherdivan called for imposing taxes on companies in the countries where they actually make their profits, accusing Europe of giving major American companies preferential treatment within the framework of applying the global minimum tax.
This comes in light of an agreement known as “Side by Side,” concluded in January 2026, allowing American companies to pay taxes equivalent to the global minimum of 15 percent within the United States as well. However, the study indicated that the effective tax rate for about a third of American companies is still less than the 15 percent stipulated in the global agreement.
In a related context, recent economic data showed that US President Donald Trump’s efforts to reduce the trade deficit by imposing high customs duties did not achieve the desired results, as the United States recorded the highest level of imports in its history in August 2026.
Trump considers the trade deficit one of the most important indicators he relies on to evaluate economic performance, but the gap between exports and imports has widened again, indicating that American companies and consumers continue to buy foreign goods in large quantities despite the rise in import costs.
The US trade deficit reached its highest levels since March 2025, when companies rushed to import goods and stockpile heavily before the broad tariff package announced by Trump on April 2 took effect.
According to data from the US Bureau of Economic Analysis, the value of US imports in August 2026 exceeded exports by $105.6 billion. This development poses a challenge to the US President before the midterm elections, as one of the basic indicators on which he relies to assess the strength of the economy is going in the opposite direction than he had hoped.
The rise in the trade deficit is mainly due to increased imports of electronic chips, servers and technology equipment used to expand artificial intelligence infrastructure. The rise in oil prices, against the backdrop of the war with Iran, also contributed to increasing the value of American imports. In addition, many companies rushed to import goods and store them in advance in anticipation of possible new customs duties on imports coming from Canada, which led to an additional increase in the volume of imports, according to an economic report published by the Swiss website Watson.
Trump is based on the belief that the trade deficit reflects other countries benefiting from the American economy at the expense of the United States. However, in February 2026, the US Supreme Court canceled the fees imposed based on the state of emergency, considering that the president had exceeded the legal powers granted to him. Trump responded by imposing a 10 percent global customs duty based on the US Trade Law issued in 1974, but this measure was temporary and expired after 150 days.
Economists confirm that the trade deficit is linked to complex and multiple factors, including levels of consumption and investment, exchange rates, and capital flows, and not only to trade policies. Experts also point out that the cost of customs duties is not borne by foreign companies alone, but is often transmitted through American importers to the final consumer within the United States, which is reflected in the form of higher prices for goods and services.
