To President Trump and congressional Republicans, the overhaul of the tax code that became law on Friday will make the United States a better place to do business. To the rest of the world, it has the potential to challenge the global economic order, creating an uneven playing field and setting off a race among countries to cut corporate taxes.
The overhaul is already threatening economic relations, adding to concerns that Mr. Trump is advancing a nationalistic agenda at the expense of other countries.
European leaders this week raised the prospect of a trade battle, implying that they may fight the new tax rules before the World Trade Organization. Chinese officials are readying defensive measures to protect the country's economy and its competitiveness.
On Friday, Mr. Trump again emphasized his "America First" mantra, saying at a signing ceremony that the tax bill would mean more jobs and investment in the United States. "A lot of things are going to be happening in the U.S.A.," the president said. "We're going to bring back our companies. They've already started coming back."
It all starts with the corporate tax rate.
The new rate — down to 21 percent, from 35 percent — takes the United States from the top of the global tax spectrum to the lower end. Countries like Australia, France, Germany and Japan, all of which have effective corporate tax rates of at least 30 percent, will be under pressure to follow.
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"It's a huge incentive to governments around the world who want to see more investment to be part of that," said Andrew Mackenzie, the chief executive of the mining giant B.H.P. Billiton, which has its headquarters in Australia and major operations in North and South America. "They will have to follow suit."
Corporate rates were already on a downward trajectory. Many countries have used low taxes as an advantage over the United States, which offers a huge domestic market, plentiful venture capital and relatively light workplace regulation.
"There will be pressure for a new round of lowering corporate taxes," said Stefano Micossi, the director general of Assonime, an Italian association of publicly listed companies.
China, a frequent target of Mr. Trump's over its trade practices, may also be forced to play the tax game.
For all of its appeal as a manufacturing hub thanks to its skilled work force, solid infrastructure and other benefits, China charges high taxes. On top of a standard corporate rate of 25 percent, companies are required to make social security contributions and other payments that push their tax burden higher there than it is in many other countries.
Last week, China's vice finance minister, Zhu Guangyao, pledged to "take proactive measures" in response to the tax overhaul, according to Xinhua, China's state-run news agency. "The external impact of tax policy change in the world's largest economy cannot be overlooked," Mr. Zhu said, according to Xinhua.
Mr. Zhu did not offer details about the measures China might take, but they could include streamlining regulations that foreign businesses face, or deferring certain taxes if money is reinvested locally, according to Andrew Choy, a tax partner for Greater China at EY.
Deep in the tax package's fine print were provisions that looked like protectionism to Asian and European companies.
What's in the Final Republican Tax Bill
The legislation would cut taxes for corporations. American taxpayers, in large part, would also get cuts, though most of the changes affecting them would expire after 2025.
The European Commission, which manages the European Union, objected to a tax break that companies in the United States would get for so-called foreign-derived intangible income — money they make from selling property or services abroad.
The measure is supposed to encourage companies to produce goods in the United States and sell them overseas. But European officials said the provision appeared to violate agreements among countries against subsidizing their exports.
"The commission will reflect on all possible measures that may need to be taken if the bill enters into force as agreed today," the commission said in a statement. "All options are on the table."
"As the world's largest economy, we would expect the U.S. to ensure that tax reform will be nondiscriminatory and in line with its W.T.O. obligations," the commission said.
The commission also said that a measure in the bill known as the base erosion and anti-abuse tax "appears to be discriminatory" against foreign companies.
The provision is meant to keep companies from shifting income to low-tax countries. But it adds a levy to some transactions between a bank or insurance company's American operations and its foreign affiliates, which would affect real deals, not just tax maneuvers.
The tax "may harmfully distort international financial markets," a group of European finance ministers wrote to officials in the United States last week.
In China, officials are preparing to deal with a wrinkle unique to their country: a challenge to tough Chinese laws that keep money from leaving its borders.
China sets tight controls on how much money flows out of the country, as a way of controlling the value of its currency and keeping its financial system stable. Companies that want to take more than $5 million out of the country must apply for permission from China's central bank, a process that can take months. The limits, which were tightened last year as Beijing tried to stem a tide of money leaving the country, have led to complaints from foreign companies doing business there.
"Companies know that when they send money to China, it's basically a one-way gate," said Christopher Balding, an associate professor of finance at the Peking University HSBC School of Business in Shenzhen, China.
Some Chinese officials worry that the tax measure will cause more American companies to try to take money out and are mulling new restrictions on capital flows. The newly approved tax incentives could appeal to companies that are frustrated by China's rising labor costs, ambitious local competitors and tangled legal systems, or that would rather spend their money at home or elsewhere.
How much money American companies keep in China — and how much they would want to bring home — is unclear. Many firms use accounting techniques and complicated cost-sharing arrangements with other companies to book profits in other countries. Companies with big investment plans in China would probably prefer to keep the money there than to bring it home; others may simply want to keep it there on a bet that China's currency will strengthen in value.
Experts said it was unlikely to come anywhere close to the flood of outflows that has prompted China to spend $1 trillion in recent years to prop up its currency. Still, tax experts say, some American companies are exploring their options.
Patrick Yip, a tax partner at Deloitte China, estimated that his clients — large companies with many years of experience in China — could move $20 million to $30 million on average from the country over the next year. Some clients who have accumulated as much as $80 million or $90 million in recent years could look to bring that money back, he said.
"We have clients who are in the process of thinking about where to deploy their investments," he said.
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