The G7 countries announced Saturday an agreement establishing a 15 percent global tax rate on large multinational corporations. Finance ministers from the US, UK, Canada, France, Japan, Germany, and Italy met in London to discuss the question of global taxation, which has been in discussion for almost ten years.

As part of this deal, the US agreed to limit its taxation of corporate activities abroad. The US has assessed taxes on internet companies’ activities in European countries. Under current tax regimes, European nations have been limited in their taxation of some of these companies, and have called it unfair that such companies have been able to collect revenue in their countries without being subject to taxation.

The US recently imposed, and immediately suspended, tariffs on several countries for new digital services taxes. Katherine Tai, the US Trade Representative, announced new tariffs against Austria, the UK, India, Italy, Spain, and Turkey in retaliation for their digital services taxes.

The G7 agreement should help to resolve trade conflicts that arise from debates about how to tax internet companies and other multinational companies that have been able to take advantage of low global tax rates in the past.

Notable corporate tax havens, such as Ireland, are not party to this agreement. Ireland’s finance minister stated that Ireland intended to maintain its corporate tax rate of 12.5 percent for the foreseeable future.