President Donald Trump’s decision last year to withdraw the US from a global effort to rein in corporate tax-dodging has allowed major American companies to avoid at least $40 billion in income taxes, a significant win for profitable business at a time when working class families are struggling with higher costs and stagnant pay.

The New York Times, citing securities filings, reported Friday that American Express, Paypal, Pepsi, and other major US-based corporations “avoided taxes by attributing hundreds of billions of dollars in earnings to low- or no-tax foreign locales like Cyprus, Bermuda, Switzerland, and the Cayman Islands.”

The Times noted that the companies often “funneled the profits through subsidiaries in places where they had no employees, offices, or customers.”

“Some companies using tax havens to avoid US income tax rely on federal funding for their profits,” the newspaper reported. “Thermo Fisher Scientific, the scientific equipment maker, cut its taxes by $3.5 billion last year via Malta. Honeywell, which received over $30 billion in Defense Department contracts over the past decade, used Swiss units to cut its tax rate by more than a quarter—or $301 million—last year.”

The tax avoidance was enabled by Trump’s decision, on his first day back in the White House, to end US participation in long-running international negotiations to enact a minimum corporate tax and other measures to stop companies from avoiding taxes by offshoring their profits. The Trump administration’s top international tax official, Rebecca Burch, formerly worked for Ernst & Young, which has lobbied on behalf of American Express and other companies benefiting from White House tax policy.

“While working Americans struggle to put food on the table, Trump has found another way to cut costs for the ultra-wealthy,” US Rep. Debbie Dingell (D-Mich.) wrote in response to the Times reporting. “Same story, different day.”

Trump and his Republican allies in Congress have delivered big for corporate America since taking power after the 2024 elections, doubling down on tax cuts first passed in 2017 and quietly pursuing regulatory changes that will deliver windfalls to major companies.

A recent analysis by the Institute on Taxation and Economic Policy found that at least 88 of the largest corporations in the US paid nothing in federal income tax in fiscal year 2025, “at least in part due to two separate packages of corporate tax cuts pushed through by the Trump administration: last year’s ‘One Big Beautiful Bill Act’ and the 2017 Tax Cuts and Jobs Act (TCJA).”

The Times noted Friday that the TCJA enacted “a few new levies, including one on profits that companies moved into tax havens.”

“But the provision contained an escape hatch: it permitted companies to blend the profits and taxes reported in places like Germany, France, or Japan with earnings reported in tax havens like Grand Cayman,” the Times explained. “That, in turn, helps many companies avoid the new offshore tax.”

The Trump administration also cut a deal earlier this year with the Organization for Economic Cooperation and Development (OECD) that makes it easier for US-headquartered companies to relocate profits in more favorable countries, exempting themfrom Biden-era efforts to stop such behavior.

The US Chamber of Commerce, the country’s largest corporate lobbying organization, celebrated the agreement.