This week, Jon Endean (Brooklyn) reviews a new work by Wei Cui (British Columbia), Retaliatory Taxation and the Birth of America’s First Tax Treaty (June 10, 2026).

Income tax treaties are a cornerstone of cross-border taxation in the United States, allowing individuals and companies eligible for treaty benefits to get relief from double taxation. The United States has sixty-seven tax treaties currently in effect, many of which have been revised and amended over the years. But it began with a tax treaty with France, first ratified in 1935, and Wei Cui’s paper, Retaliatory Taxation and the Birth of America’s First Tax Treaty, examines the historical context for that treaty’s negotiation and ultimate ratification.

Specifically, as Cui points out, the treaty came into being at a point of tension surrounding how to respond to foreign tax provisions that were viewed as being unnecessarily burdensome on U.S. individuals and companies. On one hand, Congress enacted two pieces of legislation to arm the President with tools to allow the United States to retaliate against foreign governments, whether by increasing tariff rates (section 338 of the Tariff Act of 1930) or by increasing income tax rates (what is now section 891 of the Internal Revenue Code). Neither provision has ever been used (though both remain on the books as law), because rather than the United States using those tools, it ended up entering into an income tax treaty with France, which eventually became the dominant mechanism of resolving bilateral tax controversies, particularly after World War II.

In short, the treaty was negotiated by representatives of two different administrations (the Hoover administration and the Roosevelt administration) and was set against the backdrop of several other key policies that were being carried out in a similar time. Specifically, Cui highlights the Hawley Bill, a never-adopted bill that would have exempted foreign individuals and corporations from U.S. income tax if the Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury, determined that the other country granted an equivalent exemption. The idea behind this bill was to create a legislative mechanism for reciprocal relief from double taxation. Treasury was pushing this idea because there was considerable concern from Treasury that a tax treaty would be unconstitutional. While this is largely seen as an academic question today, because treaties are negotiated by the President and ratified by the Senate, there was (and, arguably, still is) a concern that tax treaties run afoul of the Origination Clause, which requires revenue-raising bills to originate in the House of Representatives. Yet, as Cui writes, it was ultimately the State Department that took over the negotiations, and the treaty route prevailed notwithstanding these constitutional concerns.

That choice—to seek resolution by treaty, rather than through retaliatory legislation—has long been considered the norm in international tax, but what Cui does is demonstrate that it is not obvious to think of this as inevitable. This is especially true given the consideration of what would have been section 899, a tax that would have enabled retaliatory action against countries implementing Pillar Two against U.S. multinational companies. Rather than the treaty-dominated era that began in the 1930s being the norm, that may have been more contingent and fragile than later practice made it appear, and we may now be looking at a return to an older logic of retaliatory taxation, similar to what was passed by Congress in the 1930s (but ultimately not used). 

One of the biggest strengths of this paper is that it gives a thorough historical look at the background to the first tax treaty into which the United States entered. That is interesting in and of itself, but Cui also identifies how the treaty was ratified amid a milieu in which Congress was worried about tax fairness. He is right to point out that there are parallels between the nature of the tax debates in the 1930s and those in the present day. The reemergence of retaliatory tariffs (though not section 338, which, ironically, is the one tariff statute that President Trump has not used, or attempted to use!) and the consideration of what would have been section 899 represent a potential shift back to retaliatory taxes and away from bilateral tax treaties.

There are, however, several ways in which Cui might consider strengthening the piece. First, while the history is very interesting, there are likely ways of tightening the history. In its present state, the piece risks feeling like simply a historical overview and burying the potential payoff amid descriptions of the congressional record from the 1930s. While that historical background has enormous value in and of itself, this paper is not framed as just a historical piece, but as an attempt to frame that history into a broader understanding of the dynamics present in international tax at the time—dynamics that lead to a payoff relevant for the present-day. With that in mind, it would be helpful for the paper to more robustly connect the history to that payoff and connect it earlier in the piece.

Relatedly, the paper might do more to connect the different legal mechanisms that are discussed in the piece. Each plays an important role in shaping the conclusions that Cui lays out, and it would benefit the reader to more fully understand the precise role each was playing: The (never-passed) Hawley Bill, which reflected Treasury’s preferred means of reciprocal exemption (since there was no Origination Clause issue); section 338 of the Tariff Act of 1930, which empowers the President to impose retaliatory tariffs; what is now section 891, which imported the retaliatory mechanism into the tax code; and of course, the U.S.-France tax treaty, which is the cooperative mechanism that ultimately prevailed. The paper could do more, then, to show that these are not just contemporaneous historical episodes, but different ways that politicians were trying to solve similar problems relating to international tax and trade.

Nonetheless, this is a valuable contribution to the literature for two principal reasons. First, the account of how the first income tax treaty involving the United States came to be is historically interesting and useful framing for how the international tax order came into being—especially since that international tax framework is under increasing pressure in the present day. Second, the paper identifies the important ways in which bilateral negotiations, unilateral retaliation, and domestic tax legislation interact with one another. And that, surely, is something that we will continue to increasingly see in the future.

Here is the rest of this week’s roundup:

Christine Grace Amado (World Citi Colleges), Digital Transformation in Governance: The Case of the Bureau of Internal Revenue (May 25, 2026)

John L. Campbell (Georgia, School of Accounting), Ronen Gal-Or (Bentley University), Vic Naiker (University of Melbourne) & Iliyas Mohammad Yusoff (Deakin University), Auditor-Affiliated Tax Employees: Hiring Tax Professionals from the External Audit Firm (May. 23, 2026)

Harvey P. Dale (NYU), Daniel J. Hemel (NYU) & Jill S. Manny (NYU), DAF Sponsors Should Stand Up for Nonprofit Sector Independence, 191 Tax Notes Fed. 1305 (May. 25, 2026)

Zackery D. Fox (BYU), Ryan J. Wilson (Iowa Business), Travis Dyer (BYU) & Michael S. Drake (BYU), Tax Talk in Analyst Reports (Jun. 8, 2026)

Salvatore Lo Gatto, From Transactional to Annual Conflict of Interest: The No Deduction Area Compared with International Consumer-Directed Tax Incentive Systems (May 25, 2026)

Jeffery M. Kadet (Washington), Philip Laroma Jezzi (University of Florence), Brian Visalli, David G. Chamberlain (Cal State Poly), Stephen L. Curtis & Reuven S. Avi-Yonah (Michigan), Three Bites of the Apple, 121 Tax Notes Int’l 1595 (Mar. 2, 2026)

Jeffery M. Kadet (Washington), Brian Visalli, David G. Chamberlain (Cal State Poly) & Stephen L. Curtis, Support for the Apple Decision: A Response to Blanchard, 121 Tax Notes Int’l 543 (Jan. 19, 2026)

Insha Khan (Campbellsville University), Enforcing Ethics in the Age of Artificial Intelligence: Circular 230 and AI-Assisted Tax Practice (May. 23, 2026)

Jinyan Li (York University), Offshore Tax Havens: An Intriguing Problem for Canadian Tax Law, 120 Tax Notes Int’l 1645 (Dec. 8, 2025)

Jinyan Li (York University), Pillar 2 as a New International Fiscal Law, 121 Tax Notes Int’l 637 (Jan. 26, 2026)

Jinyan Li (York University) & Angelo Nikolakakis, Shrinking Tax Sovereignty in Canada? Evidence from the Income Tax Act, Can. Tax J. (forthcoming 2026) (Jan. 26, 2026)

Ana Isabel Lopes (ISCTE-IUL Instituto Universitário de Lisboa), Joana Cruz & André Narciso, Digital Tax Reporting: Professional Accountants’ Perspectives on Standard Audit File for Tax (SAF-T) (Jun. 9, 2026)

Luke Maher (Seattle), On the Securitization of Residential Real Property, 56 N.M. L. Rev. 101 (2026)

Matthew Mellody, The Independent Security Study Under Treasury Regulation §1.132-5(m): A Practitioner Framework for Audit-Defensible Executive Protection Tax Compliance in the Post-Thompson Era (May. 26, 2026)

Thomas Mulligan (Georgetown), What Do AI Companies Deserve? Shapley Attribution and Optimal Tax Theory (May 7, 2026)

Laura Snyder, A Tale of Two Emigrations: Why the Pope Needs Protection from the United States, 50 S. Ill. U. L.J. 222 (2026)