VATICAN CITY: Nobel economics laureate Joseph Stiglitz argued at a global conference on Thursday that nations should counter the policies of US President Donald Trump’s “dysfunctional” administration by imposing tariffs and taxing American multinationals.

The American economist was speaking at a conference on corporate tax reform held in Vatican City, with speakers including Brazilian President Luiz Inacio Lula da Silva and Spanish Prime Minister Pedro Sanchez.

“We have to think of ways to respond creatively to what is a dysfunctional government in the United States,” said Stiglitz, who has long championed reform of international tax rules to ensure multinational corporations pay their fair share.

He said Trump’s move this week to freeze enforcement of a long-established anti-bribery law was symbolic of the “illicit flows” across borders due to corruption. “Now we have the president of the United States saying bribery is OK. ‘It’s going to be great for American business,’ he said,” Stiglitz said.

Trump on Monday ordered the Department of Justice to freeze enforcement of the Foreign Corrupt Practices Act, a law prohibiting US companies from bribing foreign government officials to gain business.

Stiglitz said the international community should expand its use of “countervailing duties”, or tariffs imposed by one country to counter subsidies by another, “to say, if you allow bribery, that is a subsidy to your companies”.

“If you don’t do anything about climate change that’s a subsidy and those countries that are engaged in not dealing with climate change face an extra tax,” he added.

“If the United States disbands its USAID programme, causing an enormous suffering around the world without any notice, abuse of human rights in a basic way, the rest of the world should say, ‘Well, we will tax your multinationals to get the revenue to maintain USAID.” Stiglitz is the co-chair of Independent Commission for the Reform of International Corporate Taxation (ICRICT), an organisation that seeks to put an end to tax havens, and which convened on Thursday’s meeting.

In November, G20 leaders agreed in Rio di Janeiro to cooperate to get the world’s billionaires to pay more in tax. But efforts to reduce loopholes for multinational cooperations on the global level have stalled.

Trump has pulled the US out of the Organisation for Economic Co-operation and Development’s (OECD) global tax deal, signed by close to 140 countries, which levies a 15 percent minimum tax on corporate profits.

Published in Dawn, February 14th, 2025