Global tax governance—via the OECD’s BEPS 2.0 and a proposed UN tax convention—now rivals trade as a geopolitical battleground over who sets the rules and who gets to tax what, where, and how.

President Donald Trump’s return to the White House—with tariffs again at the center of U.S. policy—has undeniably rewritten the terms of global trade. But another arena, just as consequential and far less understood, is moving just as quickly: global tax governance. A new chapter in the international political economy is being drafted through the OECD’s BEPS 2.0 agenda and the nascent UN Tax Framework Convention, two efforts that together seek to remake the plumbing of a modern cross-border tax order. If you follow foreign affairs, you can’t ignore this. Today’s tax politics highlight two significant storylines: a reshuffling of great-power influence and a thorough reassessment of how—and for whom—international institutions operate.

For decades, a U.S.–European partnership effectively steered the OECD’s tax work, especially after the organization introduced its Model Tax Convention in the 1960s. That tacit tandem is now strained. Post-2008 shocks—an assault on bank secrecy, rising crackdowns on tax havens and evasion, and the digitization of the economy—have exposed real divergences in interests and methods. The friction today is not merely between blocs; it’s within them, as the United States and parts of Europe clash over who bears which tax burdens and how to police profit shifting in a dematerialized economy.

Even so, Washington retains outsize leverage. It combines a market of unrivaled pull with unusually centralized regulatory capacity; that structural pairing gives the U.S. disproportionate say over the rules of cross-border taxation. In other words, the geometry of tax cooperation still maps onto the broader architecture of the global economy, where sheer size and institutional coherence matter.

China, meanwhile, has moved from bystander to counterweight. Beijing supports tax arrangements that ease the overseas expansion of its multinationals, and increasingly, it is experimenting with building its own international tax capacities. It is not yet the system’s architect, but it is no longer content to be merely a rule-taker.

The venue question—OECD or UN—is not bureaucratic trivia. It’s the heart of a North–South contest over agenda-setting power. Since the 1950s, the OECD has been the primary forum for international tax coordination. The inclusion of developing countries, however, only truly accelerated after the global financial crisis, notably through the G20-backed Base Erosion and Profit Shifting project and, more recently, its Pillar One and Pillar Two updates.

That inclusion has been partial and often contentious. Critics point to opaque membership standards and selective enlargement at the OECD—“vague rules” that have tended to privilege advanced income levels, democratic credentials, and geopolitical alignment. The result: a perception, especially in the Global South, that the club that writes the rules is still a club.

This is why the UN Tax Framework Convention matters. Driven by a coalition led by African states, the initiative seeks to establish a more inclusive framework for establishing global tax standards. Despite resistance and abstentions from many OECD and high-income countries, the UN track has given the Global South a louder microphone and a formal place at the table. Whether the convention can ultimately redistribute influence—or merely add volume to longstanding complaints—remains the test.

Two familiar lenses from international-relations theory help make sense of the moment. Neorealists will tell you that hegemons project power through and around institutions; when the rules threaten core interests, they sidestep. That reading sees the U.S. stance—up to and including walking away from the UN tax talks—as evidence that, whatever the forum, American preferences will constrain outcomes. On this account, the UN convention may produce a process, but only a limited system-level change.

Neoliberal institutionalists counter that rules, once built, change behavior—and that imperfect forums can still produce cooperation. By this view, reforming the OECD’s two-pillar project and building a UN counterpart are not contradictory but complementary: redundancy can harden norms, broaden participation, and improve enforcement even if neither venue is fully representative on its own.

History gives both sides material. From roughly 1960 to the early 2000s—the period of long stability in the modern tax regime—OECD model conventions and bilateral treaties formed a global network that facilitated cross-border investment, often on asymmetric terms. States signed where it suited them; the web thickened all the same.

Despite the multilateral flourish of recent years, bilateral tax treaties remain the dominant instruments of cross-border tax coordination. They are drafted from model conventions (usually OECD or UN) but negotiated pairwise, allowing states to tailor terms to their strategic and commercial relationships. Bilateralism is not a bug, but a durable feature: it has survived the postwar reconstruction of the transatlantic alliance, the reorganization from the OEEC to the OECD, and the digital turn.

Here’s the twist. Recent “multilateral” tools in tax—whether BEPS’s minimum standards or the envisioned UN convention—often function less to supplant bilateral deals than to discipline, harmonize, and preserve them. Multilateralism, in other words, is increasingly the scaffolding that supports an unruly bilateral architecture.

The politics of tax have intensified over the past few years because they now sit at the intersection of geoeconomic competition, digital sovereignty, and fiscal need. The questions are blunt: Who gets to tax what, where, and by how much? Which institutions have the authority to say so? And how do systemically important states behave when the answers cut against their interests?

Foreign-policy observers should treat these questions not as technocratic footnotes but as core to the future of globalization. Trade may set the headlines. Tax writes the fine print that governs what follows. If the OECD and the UN can be made to work in tandem—one anchoring standards among capital exporters, the other widening voice among capital importers—the system could become both more predictable and more legitimate. If not, expect more forum-shopping, more unilateral fixes, and more friction that bleeds into the rest of international economic life.

The upshot is simple: global tax affairs are no longer a specialist’s niche. They’ve become a front line for power, fairness, and institutional design in the twenty-first-century economy. Paying attention now is not optional; it’s the price of understanding what comes next.