US Treasury Secretary Janet Yellen on Saturday called on other rich countries to maintain spending to support their economies even as the COVID-19 pandemic subsides, saying that inflation in the United States this year will be high but transitory. .
Yellen told a news conference after G7 finance ministers met in London that they needed to invest in fighting climate change and inequality, even after getting their economies “back on track” after the massive coup. of the pandemic.
His comments placed a different emphasis on fiscal support than the joint statement by the G7 finance ministers, which also underscored the need to ensure the long-term sustainability of public finances once the recovery takes hold.
“Most countries have fiscal space, and they have the capacity to put fiscal policies in place that will continue to promote recovery and address some of the long-term challenges we all face in terms of climate change and growth. inclusive and sustainable, and we urge countries to do so, “he said.
Last week, the administration of US President Joe Biden unveiled a $ 6 trillion budget plan that opponents say will fuel higher inflation, something Yellen said Saturday was unlikely to be permanent.
Yellen welcomed the deal to establish a corporate tax of at least 15% as a return to multilateralism that would help stabilize tax systems, while preserving national authority to set tax rates and policies.
“I consider this to be a historic achievement, showing that multilateral collaboration can be successful,” Yellen told reporters.
The United States was still chasing a minimum of 21% for US companies’ overseas profits, even though the G7 had agreed to a minimum of 15%, he said.
“We have not demanded or expressed the opinion that it is necessary for us to have the same level globally, but we do expect countries to be ambitious and for the agreement to be at least 15%. So we have not yet set the final rate.” Yellen said.
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Treasury officials have said they believe that a higher tax rate in the United States will create incentives for other countries to raise it, as they would otherwise lose the potential revenue of American companies in their territory.
