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The Daily Brief: G7 Strikes a Deal Raising Tax Rate on Multinational Companies

G7 Strikes a Deal Raising Tax Rate on Multinational Companies

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Summary:

  • This Sunday, the Group of Finance ministers held a meeting in London to finalize a deal to increase the tax rate to 15% on multinational companies in order to combat tax avoidance.   
  • The agreement was first posed by United States President Joe Biden at 21% which was later lowered to 15% by the Treasury Department.
  • Those backing the deal include The United Kingdom, France, Germany, Japan, Canda, and Italy. 
  • The G-7 nations have been trying to fix the rules in order to stop large tech companies operating in multiple countries who end up paying lower tax rates. The deal also aims at avoiding undercutting by other countries with their low taxes. 
  • The tax will apply to companies around the world who have a 10% profit margin, allocated towards the countries where the company operates.
  • Global economic recovery is high on the agenda for G-7, as many countries whose economies suffered through the pandemic borrowed from their wealthier counterparts.
  • The historic agreement may affect Apple, Google, Amazon, Facebook, and more. The deal will be further discussed at a meeting in Venice. 

Sources

https://www.bbc.com/news/world-57368247

https://www.cnn.com/2021/06/05/business/g7-biden-global-tax-intl-gbr/index.html

https://www.nbcnews.com/news/world/g7-finance-ministers-strike-landmark-deal-taxing-multinational-tech-giants-n1269728

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Rohingyan Refugee Boat Reaches Land After 100+ Day Voyage

  • A boat carrying Rohingya refugees has landed on an Indonesian island after traveling for 113 days.
  • The boat set sail from Cox’s Bazar in Bangladesh on February 11th, however it experienced engine failure on its 4th day of travel which prolonged the voyage
  • Of the 90 passengers on the boat, 8 were found dead by Indian Coast Guards. Most of the passengers were women and children hoping to reach Malaysia
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Nicaraguan Presidential Challenger Detained Months Before Election

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Diario La Nación, CC0, via Wikimedia Commons
  • Nicaragua’s opposition leader Cristiana Chamorro has been placed under house arrest by police after they raided her home for more than 5 hours on June 2nd.
  • Chamorro faces charges of money laundering and mismanagement of the Violeta Barrios Foundation, a non-profit organization she had chaired. Chamorro denies all allegations. 
  • Chamorro, a 67 year old journalist, is likely the only candidate to obstruct Nicaraguan President Daniel Ortega from securing a fourth term in the November elections. 
  • The US has demanded that Ortega’s government release Chamorro; US State Department spokesman Ned Price claims that the detention of Cristiana Chamorro “is an abuse of [the government’s] rights, and it represents an assault on democratic values, as well as a clear attempt to thwart free and fair elections”.
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Armed Attack in Burkina Faso Kills 100

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Department of Foreign Affairs and Trade, CC BY 2.0 via Wikimedia Commons
  • At least 100 people have died in an armed attack in the Solhan village, north of Burkina Faso. A local market and several homes were also burned down. No group has claimed responsibility for the attack.
  • In areas bordering Niger and Mali, violence by extremist groups is common. Armed groups frequently raid homes and carry out attacks in the region. More than one million people have fled their homes in Burkina Faso because of conflict from armed groups.
  • Fourteen people were killed last week and thirty people last month, in two attacks near Burkina Faso. The attack today is the worst the country has faced in years, and the government has declared a 72-hour period of mourning.
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UN Warns of Imminent Famine in Ethiopia’s Tigray Region

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Rod Waddington from Kergunyah, Australia, CC BY-SA 2.0 , via Wikimedia Commons
  • The United Nations Humanitarian Chief, Mark Lowcock, warned that famine is imminent in the Tigray region of Ethiopia, with hundreds of thousands of people at risk of death.
  • The conflict between the Ethiopian government and Tigray leaders has caused the death of thousands, a severely struggling economy, and widespread human rights abuses. Eritrea has become an ally of Ethiopia in the conflict.
  • There are thousands of people in areas controlled by Tigrayan or Eritrean forces where it is difficult to deliver aid. Lowcock said the leaders of seven major countries need to put this conflict on the agenda for the G7 summit in Cornwall, England.
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All views expressed in this editorial are solely that of the author, and are not expressed on behalf of The Analyst, its affiliates, or staff.

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Salman Rushdie Severely Stabbed due to his Publication of the Book “The Satanic Verses”

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Salman Rushdie 2014
  • Salman Rushdie, an author, was severely stabbed in his neck and abdomen on stage by a suspect named Hadi Matar, causing him to be on a ventilator and potentially losing an eye.
  • An Iranian leader back in the 20th century wanted Rushdie killed because of his novel, Satanic Verses, that many Muslims found disrespectful. This led Salman to go into hiding for almost a decade.
  • Translators from different countries reading this book were harshly stabbed to death when the book came out and Iranian leader, Ayatollah Khomeini called for Salman’s execution for three million dollars.
  • The Iranian government has not yet responded to this issue, but many Iranians in the media claim him to be an apostate who later became an atheist.

All views expressed in this editorial are solely that of the author, and are not expressed on behalf of The Analyst, its affiliates, or staff.

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China Threatens Consequences if Pelosi Visits Taiwan

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  • US House of Representatives Speaker Nancy Pelosi has landed inTaiwan. Prior to the visit, China’s Foreign Ministry has voiced their disapproval, stating that “China will take resolute responses and strong countermeasures to defend its sovereignty and territorial integrity.”
  • US Secretary of State Antony Blinken emphasized in response  that “The speaker will make her own decisions about whether or not to visit Taiwan,” and that the US is looking to Beijing to “act responsibly and not to engage in any escalation going forward.”
  • The US has made it clear that members of Congress routinely visit Taiwan and that this trip is non-threatening and has precedent. Even so, some officials have expressed concern that China may invade Taiwan’s air defense zone or send missiles near Taiwan in retaliation.
  • Pelosi has criticized China’s leadership and vocalized support for Taiwan in the past. She is currently on her tour of Asia, with scheduled visits to Singapore, Malaysia, South Korea and Japan.

All views expressed in this editorial are solely that of the author, and are not expressed on behalf of The Analyst, its affiliates, or staff.

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First Grain Ship Departs Ukraine After Six Months of Russian Blockade

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Odesa pristav
  • The first shipment of grain departed the port of Odesa on Monday after Russia’s blockade of Ukrainian ports for the last six months trapped around 20 million metric tons of wheat and corn.
  • Russia recently made a deal with Ukraine, brokered by the UN and Turkey, allowing grain exports to resume, appeasing fears of a global food supply crisis and rising prices.
  • Ukrainian Foreign Minister Dmytro Kuleba celebrated the shipment, calling it a “day of relief for the world, especially for our friends in the Middle East, Asia, and Africa.”
  • Ukrainian President Volodymyr Zelensky was more hesitant to celebrate the shipment, stating “it is too early to draw any conclusions and make any forecasts” and he wants to “see how the agreement works and whether security will be really guaranteed.”

All views expressed in this editorial are solely that of the author, and are not expressed on behalf of The Analyst, its affiliates, or staff.

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Daily Brief

Concerns Rise As US Teeters on the Brink of Recession

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  • The US economy declines for the second quarter in a row, causing, what other countries would consider, an economic recession. 
  • The prices for groceries, gas, and other basics are rising at the fastest pace since 1981. The US Central Bank is quickly trying to raise borrowing costs in order to cool the economy and ease the prices on goods, but with the contraction, at the annual rate of 0.9% in the 3 months to July, many are still getting concerned. 
  • President Biden struggles to convince the public that the economy is sound, with the unemployment rate at a low 3.6%. But with inflation in the US hitting 9.1% in June, the fastest price appreciation in 4 months, consumer spending has slowed at an annual rate of 1%. 
  • Many other countries, such as China and the UK, have been hit harder by the surge in energy prices and the War in Ukraine, causing risks from abroad. Other countries are facing much more serious problems and once they’re hit, their problems can spill over and affect the US. 

All views expressed in this editorial are solely that of the author, and are not expressed on behalf of The Analyst, its affiliates, or staff.

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North Korea Could Possibly Be Preparing another Nuclear Test

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  • North Korea could be preparing a seventh nuclear test, especially after Mr. Kim announced that the country is fully ready for any military confrontation with the US at a Korean War Anniversary event. 
  • A US special representative in North Korea states that Jong-Un has tested an unprecedented number of missiles this year—31 to 25. Jong-Un also stated that threats from the US required North Korea to achieve the urgent historical task of strengthening its self-defense. 
  • Jong-un also stated that South Korea is reviving a plan to counter North Korea’s threat by mounting precautionary strikes; in June alone, South Korea launched 8 missiles of its own.
  • The North Korean regime is especially angry with South Korea’s new president Yoon Suk-yeol and his so-called Kill Chain strategy. This strategy allows South Korea to launch ballistic missiles and air strikes on North Korean targets if it ever feels threatened. 
  • North Korea has also not been getting as much engagement with Washington ever since Biden replaced Trump, and could be hinting at some sort of deliberate escalation by the North, and preparations have been underway at the Punggye Ri test site since March.

All views expressed in this editorial are solely that of the author, and are not expressed on behalf of The Analyst, its affiliates, or staff.

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Russia Limits Gas Supply to Germany

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Black Sea port of Theodosiya panoramio
  • Gazprom, a major Russian energy provider, has stated it will reduce the supply of gas to Germany by half via the Nord Stream 1 pipeline due to repair work. 
  • Germany has said that they see no technical reason for the decrease in gas supply. The European Union continues to accuse Russia of weaponizing energy, with Ukrainian President Volodymyr Zelensky stating, “This is an open gas war that Russia is waging against a united Europe.”
  • Ukraine and Russia signed an agreement to allow the export of grain via the Black Sea after Russia continued to block millions of tonnes from being exported. The next day, Russia struck missiles at the port, some of which hit the infrastructure of the port.
  • The US and Ukraine are optimistic that the agreement will still be implemented, with the US State Department stating, “Despite these attacks, we do understand that the parties are continuing preparations to open Ukraine’s Black Sea ports for food and fertilizer exports…we also continue to expect that the Black Sea agreement will be implemented.”

All views expressed in this editorial are solely that of the author, and are not expressed on behalf of The Analyst, its affiliates, or staff.

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