Abstract

This research examines the emergence of the U.S. “One Big Beautiful Bill” Act (OBBB) proposals as a transformative unilateral regulatory instrument in international tax law. By shifting from the transitory tax incentives of the 2017 Tax Cuts and Jobs Act (TCJA) to a regime of permanent statutory codification, the OBBB seeks to institutionalize a competitive advantage for U.S. economic sovereignty. This study offers a comparative legal analysis of how France and China have formulated distinct normative responses to this U.S.-led fiscal unilateralism.

The analysis shows that France, constrained by the multilateral legal framework of the European Union and the Organization for Economic Cooperation and Development (OECD) Pillar 2 directives, adopts a defense grounded in “multilateral legality,” using transfer pricing audits and digital services taxation to protect its tax base. In contrast, China employs an interventionist “Incentive-Based Defense,” using statutory capital lock- in mechanisms—such as the five-year reinvestment requirement—and industry-specific credits to anchor global productive capital within its jurisdiction. Furthermore, the study examines the systemic expansion of “Foreign Entity of Concern” (FEOC) and “Prohibited Foreign Entity” (PFE) rules as a new form of statutory exclusion that fragments global high- tech supply chains. 

Ultimately, this paper argues that the OBBB marks a paradigm shift from multilateral cooperation to a “New Cold War of Tax Diplomacy,” in which domestic tax codes serve as primary instruments of geoeconomic rivalry. The resulting legal fragmentation challenges the stability of the global investment environment, replacing traditional tax neutrality with a managed, institutionalized competition between divergent sovereign regimes.

Keywords: OBBB, One Big Beautiful Bill, China, France, economic sovereignty, Tax Cuts and Jobs Act, TCJA, international tax law