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The “side-by-side” solution to the Organization for Economic Co-operation and Development’s global tax system negotiated by the administration this past summer is “a monumental win for manufacturing,” but there’s more work to be done to put the agreement into effect and finalize the win, the NAM told the Treasury Department this week.

What’s going on: In June, Treasury Secretary Bessent secured an agreement with the Group of Seven industrial nations to exempt U.S.-parented firms from certain tax requirements in “Pillar Two” of the OECD’s global tax framework. However, the system has yet to be implemented, as it’s still under negotiation at the organization.

• The carveout for American companies would “protect both domestic and foreign-headquartered manufacturers investing in the United States from oppressive, job-killing taxes… [and] will help ensure fair treatment on the global taxation of U.S. companies without the need for retaliatory tax measures that would have negatively impacted foreign investment into the United States,” NAM Managing Vice President of Policy Charles Crain told the department. The communication was covered by POLITICO Pro’s Morning Tax newsletter (subscription).

Why it’s critical: If the agreement is not implemented, the NAM went on, “companies must still comply with the letter of the law in imminently forthcoming tax filings, which does not include the side-by-side system agreed to in June.”

• Lacking “guidance from the OECD and the Department of the Treasury implementing the G7 Agreement, U.S. companies will be required to comply with the discriminatory rules enacted by countries as part of Pillar Two and will operate at a competitive tax disadvantage as long as that remains true.” 
• Furthermore, delays could lead to the reinstatement of U.S. Tax Code Section 899, a proposal dropped from President Trump’s One Big Beautiful Bill Act in June that would have hindered investment in U.S. manufacturing, the NAM said.

What should be done: “We respectfully encourage you to continue your vital work to finalize the implementation of the G7 Agreement—which will benefit both domestic and inbound manufacturers,” Crain told the Treasury Department.