The US Senate approved a Republican-authored FY2026 budget resolution early on 23 April, paving the way for passage of a narrow budget reconciliation bill that most likely will not include tax measures. Republicans hope to use reconciliation to enact multi-year funding for the Immigration and Customs Enforcement (ICE) and Customs and Border Protection (CBP) agencies of the Department of Homeland Security.

The budget resolution instructs the relevant Senate committees to craft a reconciliation bill that funds ICE and CBP for more than three years. It does not include reconciliation instructions to the Senate Finance and House Ways & Means Committees, which have jurisdiction over tax, trade and healthcare issues.

Senate Majority Leader John Thune (R-SD) indicated that he was not inclined to broaden the parameters of the bill, saying "this particular exercise has a specific purpose in mind, and we intend to stay focused on it." Republicans are also considering the possibility of a third budget reconciliation bill later in the year that could include provisions related to the SAVE America Act voter ID bill and other GOP priorities.

The budget resolution could be considered by the House the week of 27 April, though there are differing opinions among some Republicans about the scope of the reconciliation bill to follow. President Trump has called for completion of a reconciliation bill by 1 June.

The House Ways & Means Committee on 22 April held a hearing on the Trump Administration's 2026 Trade Policy Agenda that touched on digital services taxes (DSTs). Ways & Means Chairman Jason Smith (R-MO) said Congress will not tolerate, and may enact legislation in response to, certain countries continuing to impose DSTs that target US companies.

U.S. Trade Representative (USTR) Jamieson Greer was asked when potential Section 301 trade investigations related to digital issues would occur and whether they would focus on particular economies and cover country-specific measures like DSTs.

Ambassador Greer said that although the government has Section 301 actions readied in draft, the USTR wants a positive outcome and is not simply seeking to impose tariffs. Further discussions with US trading partners is ongoing, with talks scheduled for 24 April with the European Union's trade commissioner, he said.

Separately, President Trump said on 23 April that the US could put tariffs on UK goods if the current UK DST is not eliminated.

A senior US Treasury official said this week that although the US achieved the goals set forth in the Pillar Two side-by-side agreement, work will continue to provide US companies clarity on their reporting obligations. Treasury intends to continue to be significantly involved in the ongoing technical work to provide further guidance, with US goals being to reduce compliance costs, "to avoid unintended outcomes … and to increase certainty" for US multinationals operating in countries that have adopted qualified domestic minimum top-up taxes.

The Treasury official was also quoted as saying that there are two outstanding questions about the side-by-side safe harbor: (1) when will countries adopt the safe harbor and (2) to what extent can companies feel confident that it will be implemented? The official said the Inclusive Framework's consensus-based approach will be advantageous in this regard because the process has allowed countries to raise issues and resolve them.