Latest news with #USMultinationals
Reuters
3 days ago
- Business
- Reuters
Irish corporate tax set for further short-term boost, fiscal watchdog says
DUBLIN, June 10 (Reuters) - Booming Irish corporate tax receipts could grow further in 2025 and 2026, even as the threat of potentially damaging tariffs hangs over the volatile source of revenue, the country's independent fiscal watchdog said on Tuesday. A six-fold jump in corporate tax revenue since 2014 to 28 billion euros last year, or 29% of all tax collected - even before an extra 11 billion euros of Apple (AAPL.O), opens new tab back taxes is included - has handed Ireland Europe's healthiest public finances. While Ireland's finance ministry expects the taxes that are mostly paid by U.S. multinationals to fall by 2% this year and return to 2024 levels in 2026, the Irish Fiscal Advisory Council (IFAC) sees four factors why they could, instead, increase. Firstly, it said the finance ministry's estimate that global tax reforms agreed five years ago would reduce corporate tax revenue by 2 billion euros a year from 2026 was not credible and that they will likely add around 3 billion euros from 2026. The first part of the OECD-led reforms that Ireland expected to divert corporate tax receipts to other countries has not been implemented, whereas Dublin has been forced to increase its low corporate tax rate to 15% from 12.5% for larger companies. IFAC said that many of Ireland's main corporate taxpayers - based in the technology and pharmaceutical sectors - were not currently impacted by U.S. tariffs and expected their global profits to increase this year. A 154% year-on-year jump in Irish pharmaceutical exports in the first quarter, as some U.S. drugmakers with Irish plants reported stocking up ahead of threatened tariffs, may separately lead to higher corporate tax payments this year, IFAC said. Finally, the exhaustion of capital allowances some firms used when they moved valuable intellectual property assets to Ireland could potentially add "billions" of euros more in corporate tax in the coming years, IFAC chair Seamus Coffey added. Coffey said IFAC did not see any downside risks to the tax take in the short term, based on broad macroeconomic trends and the current tariff regime. "We don't see it but it doesn't mean it's not there. That's down to the profitability and decisions these companies make," Coffey told a news conference. ($1 = 0.8760 euros)
CNA
08-05-2025
- Business
- CNA
Commentary: Why Trump's plans for tariffs on foreign films probably won't have a happy ending
LONDON: With its tariffs policies, the administration of US President Donald Trump aims to correct the country's persistent goods trade deficit. The president has argued that the US has been 'looted, pillaged, raped and plundered' by other countries. Trump feels it is now America's 'turn to prosper' – and he has the film and TV industries in his sights with threats of 100 per cent tariffs on foreign films. Economists cite multiple reasons why tariffs are bad for economies, from stunting growth to adding inflationary pressure. But there is a more fundamental problem, which is notable in the case of the film and TV industries. While trade data reflects a country's overall performance, it says nothing about the nature and ownership of the traded goods. Indeed, the cross-border activities and foreign investments of US-based multinationals widen the US trade deficit. Global trade flows in film and TV are a good example. US TRADE DEFICIT IN FILMS AND TV In terms of the origin of a movie, it is determined by factors including the nationality of those in key creative roles, financing, filming location and the culture reflected in the theme and story. The US has long been the world's largest exporter of films and TV, dominating global media flows for much of the 20th century. In the 1970s, the country exported seven times as much film and TV programming as that of its nearest competitor (the UK). Three decades later, the US was still exporting 4.5 times the amount of content it imported – US$12.6 billion versus US$2.8 billion. US exports have increased, reaching US$24.7 billion in 2023, and Hollywood remains the world's largest movie exporter. However, the US balance of trade in the sector has shifted dramatically. While US exports grew by 95.4 per cent between 2006 and 2023, US imports increased by 898 per cent. The trade in film and TV programming achieved balance in 2019, and my research shows that since then, the US has imported more films and TV shows than it exported. The deficit was narrowing in 2023 but imports remained 12.1 per cent higher than exports. This deficit deserves an explanation. Are Asian and European producers suddenly flooding the US with films and TV shows? Has the American public developed an insatiable appetite for Nordic noir or K-drama? The reality is that US-based media conglomerates like Disney, Netflix and Warner Bros Discovery have changed strategy. They have moved away from their previous focus on exports to direct-to-consumer international distribution. What does this mean? Well, instead of licensing content to foreign broadcasters and cinemas (which they still do, but to a lesser extent), they retail their content internationally, using their own global streaming services. THE US ENTERTAINMENT PARADOX Maintaining these large content libraries explains the shift of the US trade balance. US-based streamers export less because they now retain more of their content for exclusive distribution on their own streaming platforms. And they import more because they acquire foreign content in greater quantities than ever before. For example, Stranger Things is produced by Netflix in the US. As such, it does not show up in export figures. Squid Game, on the other hand, is a Korean export and shows up in US import data. Moreover, Walt Disney has decided to retain the exclusive rights to its franchises, forgoing licensing sales. In 2020, the company licensed 59 per cent of its scripted series to third parties, 18 per cent in 2021, and only 2 per cent in 2022. All the US streaming giants license and commission foreign content. Netflix in particular has spent more on international content than US programming since 2024 (US$7.9 billion versus US$7.5 billion). Hence the creation of a paradox: US trade data in audiovisual services reveals a trade deficit, yet the US-based entertainment industry has never been so dominant globally. There are similar patterns in industries in which US-based multinationals are located at the apex of transnational supply chains. The jeans that Levi Strauss imports from Bangladesh, the trainers that Nike imports from Vietnam, and the car components Ford imports from Brazil all show up in US trade statistics. But these goods are, essentially, American-owned assets. About 70 per cent of trade involves global value chains (GVC), as raw materials and components cross borders multiple times before being assembled into a final product. In today's global economy, the complexity of most products requires companies to cooperate along transnational production networks. As businesses and countries specialise in specific tasks, GVCs are the most efficient way of producing goods and services. The streaming industry simply mirrors these wider patterns. HOLLYWOOD TARIFFS ARE MISGUIDED Mindful of the US trade deficit in films and TV programmes, Trump announced the plans for 100 per cent tariffs on all films produced outside the US. However, his attempt to 'make Hollywood great again' is misguided. While Hollywood has new rivals to contend with, notably South Korea, it remains the world's largest film and TV exporter. Following a short period of decline in the late 2010s, US exports have continued to grow. For Trump, the vexing issue is that the US imports more films and TV programmes than its exports. But that is due to US-based platforms' foreign content hoarding. Adolescence and Squid Game have indeed contributed to extending the gap between US imports and exports, but they are US-owned assets that have earned Netflix hundreds of millions of dollars in subscription fees. (Squid Game's impact value for Netflix was estimated at US$891 million in 2021.) And American content on US-based streaming giants does not show up in trade data. The whole world is watching Black Mirror and Ransom Canyon, but these series have never been exported. Rather, they are on a global platform (Netflix). US-based media conglomerates have never been so dominant in the global media market. In short, trade data does not tell the whole story. If implemented, these tariffs will certainly have far-reaching consequences for the film and TV industry. But they are unlikely to make anyone more prosperous.
