Global energy companies with operations in the US are increasingly concerned about the “revenge tax” now under consideration in the Senate.
Section 899 of the Big Beautiful Bill, the Republican-backed tax-cutting program, would significantly raise taxes on income generated by the US branches of foreign companies, when that income is returned to the parent. The idea is to punish governments — particularly in the EU, UK, and Canada — that the Trump administration deems to impose unfair taxes on US companies working there. But the effect will be to choke off foreign investment, analysts say; according to the consulting firm EY, the measure would decrease US GDP by $55 billion annually for the first 10 years and even more after that.
All sectors would be affected, but energy, which has particularly high capital requirements, would be hit especially hard, Jonathan Samford, CEO of the Global Business Alliance, a lobbying group for non-US companies with US operations, told Semafor. Foreign direct investment in the US energy sector amounted to more than $766 billion in 2023, according to GBA. “Energy companies are going to face a tremendous punitive tax” if the measure is passed, Samford warned. “The president talks about driving US innovation on energy forward, but they’re going to hamstring the companies that are best positioned to do that.”