Global finance leaders move closer to international tax agreement.

The overhaul under discussion includes a global minimum tax that companies would pay regardless of where they locate their headquarters.

Daily Business Briefing

June 4, 2021Updated June 4, 2021, 5:17 p.m. ET

The overhaul under discussion includes a global minimum tax that companies would pay regardless of where they locate their headquarters.

President Biden praises ‘historic progress’ in job gains, crediting his policies.The Fed wanted a string of strong jobs reports. It’s getting bumpy progress instead.Staples returns to Office Depot with a $1 billion offer for its consumer business.The latest: Royal Caribbean will resume cruises from Florida and Texas.

Finance ministers from the Group of 7 gathered in London on Friday. The meetings with be the first test of Janet L. Yellen’s deal making ability as Treasury secretary.Credit…Pool photo by Stefan Rousseau

LONDON — Finance ministers from the Group of 7 nations were on the cusp of a broad agreement over how to overhaul the international tax system and were aiming to announce a pact on Saturday that could have financial consequences for some of the world’s largest companies, according to officials familiar with the negotiations.

A deal would come after years of discussion and, if implemented, would bring about significant changes to world taxation. The agreement would redefine how and where businesses are taxed and, at least theoretically, put an end to tax havens that have eroded the finances of some of the world’s leading economies.

“I’m confident that there will be an agreement tomorrow morning on international taxation,” Bruno Le Maire, France’s finance minister, said at a briefing at the conclusion of the first of two days of meetings.

The overhaul under discussion would include a new global minimum tax that companies would have to pay regardless of where they locate their headquarters. It would also place an additional tax on some large multinational companies, likely forcing technology giants such as Google, Facebook and Amazon to pay taxes to countries based on where goods or services are sold.

The Biden administration has been pushing for an agreement that it believes would prevent companies from shifting profits outside the United States in search of lower taxes, and stop the proliferation of digital services taxes in Europe that it sees as unfairly targeting American technology companies. Janet L. Yellen, the Treasury Secretary, has said the United States support a tax of at least 15 percent.

That type of global tax would help President Biden in his effort to raise taxes on American corporations to pay for his infrastructure plans. Business groups and Republicans have complained that raising taxes in the U.S. will put American companies at a global disadvantage and provide an incentive for firms to move overseas. A global minimum tax would help to discourage that from happening because a firm would have to pay a baseline rate to its home country on its overseas profits, making offshoring to a country with lower taxes less enticing.

Yet crucial details that will determine the scope of the agreement were still being worked out on Friday night, including the actual rate the countries would support and whether an agreement should prevent countries from imposing digital services taxes that have been passed in several European nations.

Finance ministers were grappling on Friday with whether the words “at least” should be included before the 15 percent global minimum tax in the joint statement that will be released on Saturday.

There was also debate between the United States and France, Italy and the United Kingdom about the timing of when those countries would remove their digital services taxes. According to an official familiar with the negotiations, the United States wants them to commit to dropping their taxes once a deal is finalized. However, those the countries want to wait until the agreement is fully implemented, which could take between two and four years.

A Treasury Department spokeswoman had no comment.

Top economic officials from Spain, Italy, France and Germany expressed optimism on Friday morning that the tax negotiations, which have been going on for several years, are on track. In an essay published in The Guardian newspaper, they suggested that the new negotiating approach from the Biden administration was more constructive than the tactics of the Trump administration, which walked away from the bargaining table last year.

“With the new Biden administration, there is no longer the threat of a veto hanging over this new system,” they wrote, adding that they thought a global tax agreement could be done by July. “It is within our reach.”

Officials hope that an agreement at the G7 will lead to even broader support when the Group of 20 finance ministers gather in Italy next month and pave the way to a final agreement when the G20 leaders convene in October. The negotiations are taking place through the Organization for Economic Cooperation and Development, the Paris-based international policy agency that counts the world’s wealthiest nations as members.

Implementing the deal will be complicated and will require countries to change their laws to comply with what has been agreed in principle. Republican lawmakers in the United States have already expressed concern with the proposals.

The Biden administration continues to hold out the possibility of retaliatory tariffs against European countries that have enacted digital taxes.

Earlier this week, the administration imposed tariffs on about $2.1 billion worth of goods from Austria, Britain, India, Italy, Spain and Turkey, but it immediately suspended those tariffs for 180 days to allow for negotiations to continue.

The G7 countries include Britain, Canada, France, Germany, Italy, Japan and the United States. The summit is the first in-person gathering of top officials from the world’s advanced economies since the pandemic emerged in early 2020 and turned such events into virtual affairs.

As they huddled at London’s Lancaster House, officials also discussed how much additional fiscal support their countries require, how to help developing countries gain access to vaccine supplies and ways to collaborate more effectively to combat climate change.

The meetings are first test of Ms. Yellen’s deal making ability as Treasury secretary. She met on Thursday evening with Rishi Sunak, Britain’s chancellor of the Exchequer, who has yet to publicly back the U.S. proposals. Ms. Yellen said on Twitter that it was a “great conversation” about shared priorities.

Ms. Yellen was also scheduled to meet with the rest of her G7 counterparts along with Paschal Donohue, the Irish finance minister who is attending in his capacity as Eurogroup president. Ireland, which has a tax rate of just 12.5 percent and is not part of the G7, has expressed its opposition to the global minimum tax proposals.

The G7 finance ministers hope that Ireland will bend to political pressure and raise its rate if a broad deal is reach.

Mr. Le Maire said if the deal falls through, it would mean more countries continuing to slash their tax rates at a time when governments desperately need the revenue.

“It’s vital for Europe not to go the way of a race to the bottom,” he said.







Biden Praises May Employment Gains

President Biden on Friday hailed job growth recorded in the U.S. last month, attributing the progress to his American Rescue Plan and Americans’ willingness to adhere to pandemic measures.

This morning we learned that in May, our economy created 559,000 new jobs. Unemployment rate fell to 5.8% and wages went up for American workers. That means we have now created over two million jobs in total since I took office. No other major economy is gaining jobs as quickly as ours. And none of this success is an accident. It isn’t luck. It’s due in no small part, first of all, the cooperation of the American people in responding to my effort to get Covid under control, wearing masks initially and getting vaccinated. And it’s no small part to the bold action we took by passing the American Rescue Plan.

President Biden on Friday hailed job growth recorded in the U.S. last month, attributing the progress to his American Rescue Plan and Americans’ willingness to adhere to pandemic measures.CreditCredit…James Estrin/The New York Times

The Labor Department’s report that the economy added 559,000 jobs in May, an acceleration from April, buoyed Democrats and the Biden administration on Friday, adding new fuel to the president’s claims that vaccinations and his economic program are beginning to get the economy back on track after a halting recovery from pandemic recession.

“This is historic progress,” Mr. Biden said in remarks from Rehoboth Beach, Del. “Progress that’s pulling our economy out of the worst crisis it’s been in in 100 years.”

He went on to claim credit for that progress, both from his administration’s campaign to ramp up America’s vaccine production and distribution and from the $1.9 trillion economic aid legislation he signed into law in March.

“None of this success is an accident. It isn’t luck,” Mr. Biden said, hailing “the cooperation of the American people in responding to my effort to get COVID under control, wearing masks initially and getting vaccinated.”

But the report, which fell short of analyst expectations for the second straight month and showed a slight shrinkage in the labor force, also provided fodder for Republican critics of the president. They say enhanced unemployment benefits — which were extended by Mr. Biden’s aid legislation in March — are discouraging workers from returning to jobs and holding back what could be an even faster recovery.

“Long-term unemployment is higher than when the pandemic started, and labor force participation mirrors the stagnant 1970s,” Representative Kevin Brady, the top Republican on the Ways and Means Committee, said in a news release. “It’s time for President Biden to abandon his attack on American jobs, his tax increases, his anti-growth regulations and his obsession with more emergency spending and endless government checks.”

After the April report fell substantially short of expectations, Republican governors across the country moved to prematurely end the $300-per-week supplemental unemployment benefits that began under President Donald J. Trump and are scheduled to continue through September under Mr. Biden’s aid package.

Mr. Biden said Friday those benefits had helped Americans weather the crisis but noted they expire in 90 days. “That makes sense,” he said, “it expires in 90 days.”

White House economists said last month there was not yet evidence in the numbers that the supplement was discouraging work, pointing instead to constraints like school closures and child care issues keeping women with children from returning to work, along with a large number of working-age Americans who had not been fully vaccinated. Administration economists doubled down on that reading on Friday.

“It is too soon to conclude that labor supply issues are holding back the long-term path of the recovery,” the chair of the White House Council of Economic Advisers, Cecilia Rouse, wrote in a blog post on Friday morning.

Democratic leaders in Congress continued to push for the unemployment benefits to continue as scheduled, and for lawmakers to move to enact the rest of Mr. Biden’s $4 trillion economic agenda.

“The American people need all the support they can get, especially Black and Hispanic communities that were among the hardest hit by the pandemic,” Representative Don Beyer of Virginia, the chairman of the Joint Economic Committee, said in a news release. “Lawmakers must step up. That includes continuing enhanced UI to support workers seeking jobs and Congress passing President Biden’s Jobs and Families Plans.”

Lael Brainard, a Federal Reserve governor, said she expected to see “further progress on employment in coming months.”Credit…Cliff Owen/Associated Press

The Federal Reserve was hoping for months of strong job gains that would swiftly return the economy to maximum employment — but the decent-but-not-great May employment gain underlined that although the labor market is healing, progress is bumpy.

Employers added 559,000 jobs last month, below the 675,000 new jobs that economists surveyed by Bloomberg had expected. That gain would be strong in normal times, but it came after a sharp hiring slowdown in April, and with the economy still 7.6 million jobs
short of its prepandemic level.

The Fed is closely watching employment data as it assesses when to dial back its mass bond purchases, which help to make many borrowing cheap and stoke the economy.

Central bank officials have said they need to see “substantial” further progress toward their two goals — maximum employment and stable inflation — before scaling down that bond buying. They have an even higher hurdle for lifting interest rates: They want to see a return to full employment and inflation that is expected to stay above 2 percent for some time before raising rates from rock bottom.

Inflation has been moving higher this year, but Fed officials have said they expect much of the pop in prices to be temporary. And when it comes to jobs, many have been clear that the economy remains well shy of their target.

“I expect to see further progress on employment in coming months,” Lael Brainard, a Fed governor, said earlier this week. “That said, today employment remains far from our goal.”

Randal K. Quarles, the Fed’s vice chair for supervision, said in a recent speech that he expected price gains to meet the Fed’s criteria for slowing bond buying later this year. But he said the labor market offered reasons for patience.

Officials had been hoping for a quicker rebound than the one that has materialized. Jerome H. Powell, the Fed chair, said at an April event that “we want to see a string of months like that,” referencing a recent jobs report that had showed a near-million jobs.

As central bankers focus on jobs, investors are also trained on the data, because they are trying to figure out when the Fed will begin to cut back on buying of government-backed bonds. The Fed has been buying about $120 billion worth of debt each month in a program called quantitative easing. Those purchases tend to push asset prices higher, and the announcement of a policy shift has the potential to be disruptive: Markets jerked wildly when the Fed in 2013 hinted that it would slow a post-financial crisis quantitative easing program.

Average earnings for all workers rose 15 cents an hour in May, down from a 21-cent gain in April, the Labor Department said.Credit…Benjamin Norman for The New York Times

Hourly pay rose in May, but more slowly than in April — a possible sign that labor supply constraints are easing.

Average earnings for all workers rose 15 cents an hour in May, down from a 21-cent gain in April, the Labor Department said Friday. There was a similar slowdown in gains for nonsupervisory workers.

Economists are watching pay particularly closely because it is a key indicator of how much trouble employers are having attracting and retaining workers. Many companies, particularly in the service sector, have been complaining that they are struggling with hiring as they try to return to business as usual. Pay data from April lent credence to those complaints, showing significant increases in average pay, particularly in the leisure and hospitality sector.

Pay for non-supervisors in leisure and hospitality jumped again in May, but by less than half as much as in April. Still, those workers have seen significant pay gains in recent months: Their average earnings were $15.90 an hour in May, up from $14.80 in April. That continues a pattern of surprisingly strong wage growth, particularly for low-wage workers, during the pandemic.

Another sign that employers are having an easier time finding workers: Leisure and hospitality workers worked fewer hours last month. That followed a big jump in working hours in April.




Jan. ’21

-2% since Feb. 2020

15.9 million employed in Feb. 2020




Jan. ’21


12.4 million




Jan. ’21


9.2 million




Jan. ’21


10.5 million




Jan. ’21


5.5 million




Jan. ’21


4.8 million




Jan. ’21


66.3 million




Jan. ’21


56.9 million

As Americans regain jobs in a healing economy, some groups are making faster progress than others — and Hispanic and Black women lag the most.

About 741,000 fewer Black women were employed in May than in February 2020, a 7 percent decline. Roughly 890,000 fewer Hispanic women were employed, down 7.2 percent. Although Americans across racial and gender groups are gaining jobs — and women actually made greater gains than men in May — those persistent shortfalls underline that a long road remains before the labor market returns to its former strength.

Women have faced special challenges during the unusual recession wrought by the coronavirus pandemic. As state and local lockdowns closed schools, women were left shouldering new child care burdens to a greater extent than men. Women, and especially those in minority groups, are also more likely to work in many face-to-face service jobs that disappeared amid lockdowns.

Economic officials say child care issues and health concerns could be influencing how quickly adults return to work. Unemployment insurance, government checks and savings amassed during months stuck at home may allow some workers to be picky as they search for new jobs.

As those trends play out, progress is also diverging sharply by age. Teenagers are flooding back into the labor market, working at a rate not seen in more than a decade. Workers older than 55, on the other hand, remain much less likely to work than before the pandemic and have made little progress in recent months.

The progress of Americans in their prime working years — which economists define as 25 to 54 years old — falls somewhere in between. A climbing share work as jobs return, but employment rates remain well below their February 2020 level.

Loretta Mester, president of the Federal Reserve Bank of Cleveland, says she is watching for more of a recovery in the prime-age labor force participation rate, which tracks adults who are working or looking for jobs.

“We still have further progress to make,” she said in an interview on CNBC after the jobs report was released.

An Office Depot in Jacksonville Beach, Fla.Credit…Diane Macdonald/Getty Images

Staples isn’t giving up its quest for Office Depot.

Staples said Friday it had sent a letter to the board of Office Depot outlining a $1 billion offer — or $18.27 a share — for its consumer business, which includes the Office Depot chain of stores and OfficeMax. Staples tried to buy all of Office Depot for more than $2 billion in January, but Office Depot rebuffed those efforts. Office Depot’s business-to-business unit comprised about half its $10 billion in sales last year.

This latest offer, which is all cash, comes at a roughly 43 percent premium to the 30-day average of Office Depot’s share price as of June 2, 2021.

Shares of Office Depot were up 12 percent Friday afternoon, giving it a market capitalization of $2.7 billion.

Staples and Office Depot have tried tie-ups before in hopes of gaining scale and becoming the country’s singular office supply store. But the retailers abandoned efforts to combine in a $6.3 billion deal in 2016 after the Federal Trade Commission sued to block the proposed merger on antitrust grounds.

The retail landscape, though, has changed significantly since then, given the rise of Amazon and other online retailers. Staples, sold itself to the private equity firm Sycamore Partners in 2017 for $6.9 billion.

Staples filed for antitrust approval to acquire Office Depot’s consumer division in November in hopes of clearing the path for such a deal. It said Monday it had made “substantial progress responding to the governmental data and document requests issued in connection” with that process.

Royal Caribbean International said on Friday that it would begin sailing six ships from ports in Florida and Texas in July and August. The return will kick off on July 2 in Miami, the company said in a statement posted on its website. “Thanks in large part to the successful rollout of vaccines, the world of adventure is beginning to open up,” Michael Bayley, the president and chief executive of Royal Caribbean, said in the statement. The cruise industry has been stalled for more than a year following outbreaks of the coronavirus onboard ships. In April, the Centers for Disease Control and Prevention published a set of technical guidelines to help cruise companies start sailing again, but an industry trade group called the instructions “burdensome and ambiguous.” On May 25, Royal Caribbean became the first cruise line to receive approval from the C.D.C. to conduct simulated voyages.

Walmart said on Friday that it would close all of its stores in the United States on Thanksgiving Day this year as a show of appreciation to its workers. In announcing the closures, the retailer said that the move was a way of saying “thank you” to its employees for their hard work during the pandemic. The company, which has been criticized for not raising its starting wages this year, said it was also expanded its pandemic emergency leave policy through Sept. 30. Walmart also closed its stores last Thanksgiving.

S&P 500






The S&P 500 gained 0.9 percent on Friday after the Labor Department’s monthly jobs report showed an increase in hiring in May compared with a surprisingly low number the month before.

U.S. employers added 559,000 jobs in May, the government said and the unemployment rate fell to 5.8 percent. Investors and policymakers are trying to deduce what is happening in the labor market, in which millions of people are unemployed but some employers say they are struggling to hire.

The slower than expected increase in jobs is likely to give the Federal Reserve more time before policymakers consider pulling back monetary stimulus. The jobs report “is allowing investors to relax a little about the prospect of Fed tightening,” Mike Bell, a strategist at JPMorgan Asset Management, wrote in a note.

The yield on 10-year Treasury notes fell 7 basis points, or 0.07 percentage points, to 1.55 percent, as investors bet that interest rates would stay lower for longer.

An index of the U.S. dollar, which tracks the currency against major peers, fell 0.4 percent.

Oil prices rose. Futures on West Texas Intermediate, the U.S. crude benchmark, climbed 1.2 percent to $69.62 a barrel, the highest since late 2018.

Travel stocks

Travel and tourism stocks fell in Europe after Britain removed Portugal from the list of countries people could travel to without quarantining on their return. Britain also didn’t add any new countries to the list, citing rising coronavirus cases.

Earlier on Friday, shares in Rolls-Royce, which makes and services engines for airliners, fell 1.9 percent. IAG, which owns British Airways, dropped 0.9 percent after falling 5.4 percent on Thursday when the changes to the travel list were announced. EasyJet and Wizz Air shares declined about 6 percent this week.

The Stoxx Europe 600 gained 0.4 percent.

Deborah Solomon

The fact that the labor force participation rate was essentially flat is going to create more pressure on President Biden and Democrats to transition the unemployment insurance supplement into a hiring bonus.

Patricia Cohen

The desire for remote work seems to be one reason why face-to-face jobs in restaurants and bars are going unfilled. A ZipRecruiter survey found 44 percent of people want remote work even after the pandemic ends.

Patricia Cohen

There is a mismatch between the type of jobs employers are offering and the type that workers want. More than half of people searching on ZipRecruiter want remote work. Just 10 percent of employers are offering that.

Neil Irwin

The boom in teenage employment is real. The jobless rate among 16- to 19-year-olds dropped from 14.8 percent in January to 9.6 percent in May.

Patricia Cohen

Most economists don’t expect job creation to really go into overdrive until the fall when schools reopen, enhanced unemployment benefits end and more people are fully vaccinated.

William Ackman, the chief executive of Pershing Square Tontine Holdings, a special purpose acquisition vehicle.Credit…Drew Angerer for The New York Times

William Ackman’s jumbo special purpose acquisition company has finally found its big deal: It is closing in on an agreement to buy a 10 percent stake in Universal Music Group, the home of artists like Taylor Swift, at a $42 billion valuation.

If completed, the transaction would be the biggest involving such a fund, known as a SPAC, to date — and it would certainly be among the most complex, the DealBook newsletter notes.

Mr. Ackman’s SPAC, Pershing Square Tontine Holdings, would invest $4 billion for a 10 percent stake in Universal, of which the French conglomerate Vivendi owns 80 percent and China’s Tencent owns 20 percent. A deal could be struck before the end of the month.

There would still be $1.5 billion left in what remains of the SPAC, and that would be rolled into a new publicly traded vehicle into which Mr. Ackman’s Pershing Square hedge fund would put more money, for a total of $2.9 billion. That vehicle would then look for another acquisition target.

Existing Pershing Square Tontine investors would also receive a financial instrument known as a right that offers them a piece of yet another new takeover vehicle known as a special purpose acquisition rights company, or SPARC.

Vivendi had already been planning to take Universal public in Amsterdam; those plans will go ahead, meaning that unlike a traditional SPAC deal, Pershing Square Tontine won’t give Universal its stock listing. SPAC investors, who would not get a vote on the deal, would instead get Universal’s shares when it later goes public.

The complex transaction is unlike any other SPAC deal, and in many ways doesn’t resemble a SPAC at all. Vivendi is a clear winner, because it would get another major investor for Universal at a higher valuation than Tencent had given the music label earlier this year.

The outcome for Pershing Square Tontine’s various investors is more complicated. Mr. Ackman’s hedge fund would end up owning at least 29 percent of the fund created from the remainder of the SPAC, giving it a greater percentage of the vehicle than it had before the Universal deal.

Those investors could also take a stake in the SPARC, giving them the option of participating in whatever deal the new fund strikes at a set price. The SPARC would have up to $10.6 billion to spend on a takeover, assuming all the rights are exercised and Mr. Ackman’s fund invests the full $5 billion it is allowed to in the new vehicle.

Neither the leftover Pershing Square Tontine fund nor the SPARC is subject to the two-year deadline that SPACs generally face.

Shares in Pershing Square Tontine plunged in after-hours trading on Thursday after news reports about the Universal transaction emerged, and opened about 10 percent down on Friday. They remain a bit above the blank-check firm’s $20 I.P.O. price, but down from a high of more than $30 a few months ago.

CreditCredit…Melissa Mathieson

Today in the On Tech newsletter, Shira Ovide writes that technology has evolved from a succession of Big Bang moments to something so meshed into our lives that we often don’t notice it.

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