An efficient direct carboxylation of a series of benzyl chlorides with CO2 catalyzed by Pd(OAc)2/dicyclohexyl (2',6'-dimethoxy-[1,1'-biphenyl]-2-yl)phosphine (SPhos) was developed to afford the corresponding phenylacetic acids in combination with Mn powder as a reducing reagent and MgCl2 as an indispensable additive. The reaction proceeded smoothly under 1 atm CO2. The application of Mn powder instead of a sensitive reducing reagent represents an operationally simple access to phenylacetic acids. Notably, MgCl2 is able to stabilize the (SPhos)2PdII(Bn)(Cl)(η¹-CO2)(MgCl2) adduct and thus facilitates CO2 insertion into the PdII-C bond, which is supported by a DFT study.