Senator Mike Crapo (R-ID), the top Republican on the Senate Finance Committee, is emphasizing the importance of ensuring that any international tax agreement does not harm American businesses. “The stakes for the United States and our national economy are high,” Crapo wrote to Treasury Secretary Janet Yellen this week. “The United States should not be willing to accept an agreement that continues to target American companies while absolving our main competitors.”

For several years, the Organization for Economic Cooperation and Development (OECD) and the Group of 20 (Group of 20) have been working to reach an agreement on international tax issues. In July, negotiators hope to reach a political agreement.

“There continues to be strong bipartisan, bicameral agreement that the United States must not agree to an OECD approach that discriminates against American companies – a point Treasury clearly acknowledges,” Crapo wrote. The OECD negotiations are focused on two issues: the first is where companies’ profits are taxed, and the second is a global minimum corporate tax rate.

Crapo stated that the United States should not support an agreement on the first topic unless it directs countries to repeal their digital services taxes (DSTs), which disproportionately target American businesses. He expressed concern about recent remarks by European Union officials indicating that the EU is moving forward with plans for a digital tax. “It would be unacceptable for the United States to support any agreement that allows DSTs or similar unilateral measures to continue to be imposed on US companies,” Crapo wrote. During the confirmation hearing for Treasury Department nominees on Tuesday, Crapo and several other Republican senators questioned them about the OECD negotiations.

When asked about DSTs, Lily Batchelder, President Biden’s nominee for Treasury assistant secretary for tax policy, said she has “a bias against taxes that target a specific industry and certainty against those that are focused solely on U.S. companies.”

During the hearing, Senate Finance Committee Chairman Ron Wyden (D-Ore.) stated that opposition to DSTs is bipartisan, describing the taxes as “the equivalent of a digital dagger aimed directly at our high-skill, high-wage companies.”

In his letter, Crapo also expressed concern that some of the United States’ competitors would be unable to sign on to an agreement on a global minimum tax rate or receive carveouts. He stated that no carveouts for competitors, including China, should be included in an agreement.

“An agreement that makes exceptions for our most important competitors would be fundamentally inconsistent with the principle that all countries should play by the same rules,” he wrote. “It would also stifle the US economy while benefiting the economies of our primary competitors.”

The Biden administration has asked the OECD to set a global minimum tax rate of at least 15%. The administration has also proposed raising the minimum tax on foreign earnings of corporations in the United States to 21% in order to raise revenue to help fund the president’s infrastructure plan.

Crapo argued that the United States should not raise its minimum tax until other OECD countries implement their own minimum taxes. “I would encourage you, if confirmed, to use your voice at Treasury to advocate that the United States not pursue raising our taxes before there is even an OECD agreement, and that we protect against discriminatory digital taxes,” Crapo said during Batchelder’s confirmation hearing on Tuesday.

Later in the hearing, Batchelder stated her support for Biden’s proposal to raise the US minimum tax. While other countries do not currently have minimum taxes like the United States, she noted that they do have provisions in place to prevent their companies from shifting profits to low-tax jurisdictions.