The United States and the Group of Seven nations have agreed to support a proposal that would exempt US companies from some components of an existing global agreement, the G7 said in a statement on Saturday.

The group has created a “side-by-side” system in response to the US administration agreeing to scrap the Section 899 retaliatory tax proposal from President Donald Trump’s tax and spending bill, it said in a statement from Canada, the head of the rolling G7 presidency.

The G7 said the plan recognises existing US minimum tax laws and aims to bring more stability to the international tax system.

G7 officials said that they look forward to discussing a solution that is “acceptable and implementable to all”.

In January, through an executive order, Trump declared that the global corporate minimum tax deal was not applicable in the US, effectively pulling out of the landmark 2021 arrangement negotiated by the Biden administration with nearly 140 countries.

He had also vowed to impose a retaliatory tax against countries that impose taxes on US firms under the 2021 global tax agreement.

This tax was considered detrimental to many foreign companies operating in the US.