Trump Suggests Establishing a New Agency to Generate Revenue from International Sources
President-elect Donald Trump unveils the establishment of the 'External Revenue Service' to gather tariffs and duties, indicating a change in U.S. trade policy as his inauguration nears.
On Tuesday, President-elect Donald Trump announced plans to establish a new government body called the 'External Revenue Service', dedicated to collecting tariffs, duties, and other revenues from foreign sources.
He intends to introduce new import tariffs following his second term inauguration on January 20. Trump, who shared the news on Truth Social, argued that Americans have been excessively taxed by the Internal Revenue Service and that foreign entities benefiting from U.S. trade have not been contributing their fair share.
The proposal implies a significant overhaul of U.S. revenue collection, centering on foreign sources, though specifics are not yet clear.
Trump did not specify whether this agency would take over the U.S. Customs and Border Protection’s tariff collection tasks or the IRS’s collection of taxes on foreign corporate and individual income.
This announcement has sparked concerns about the possibility of increased government bureaucracy, potentially conflicting with Trump’s previous attempts to simplify government operations, such as the informal Department of Government Efficiency led by Elon Musk and Vivek Ramaswamy.
Trump’s consideration of replacing income taxes with tariffs—a topic he discussed during his presidential campaign—has faced skepticism.
Economists, including those from the Tax Foundation, suggest that a 20% tariff would generate considerably less revenue than the current tax system, estimating $3.3 trillion over 10 years compared to the IRS's annual revenue of up to $18 trillion.
Senator Ron Wyden, the leading Democrat on the Senate Finance Committee, criticized Trump’s proposal, describing it as a veiled tax increase on American families and small businesses.
Trump has outlined specific tariff rates, such as a 10% tariff on global imports, a 25% tariff on imports from Canada and Mexico, and a 60% tariff on Chinese products.
Experts caution that these tariffs could disrupt trade flows, raise costs, and provoke retaliation against U.S. exports, further complicating the U.S. trade environment.
He intends to introduce new import tariffs following his second term inauguration on January 20. Trump, who shared the news on Truth Social, argued that Americans have been excessively taxed by the Internal Revenue Service and that foreign entities benefiting from U.S. trade have not been contributing their fair share.
The proposal implies a significant overhaul of U.S. revenue collection, centering on foreign sources, though specifics are not yet clear.
Trump did not specify whether this agency would take over the U.S. Customs and Border Protection’s tariff collection tasks or the IRS’s collection of taxes on foreign corporate and individual income.
This announcement has sparked concerns about the possibility of increased government bureaucracy, potentially conflicting with Trump’s previous attempts to simplify government operations, such as the informal Department of Government Efficiency led by Elon Musk and Vivek Ramaswamy.
Trump’s consideration of replacing income taxes with tariffs—a topic he discussed during his presidential campaign—has faced skepticism.
Economists, including those from the Tax Foundation, suggest that a 20% tariff would generate considerably less revenue than the current tax system, estimating $3.3 trillion over 10 years compared to the IRS's annual revenue of up to $18 trillion.
Senator Ron Wyden, the leading Democrat on the Senate Finance Committee, criticized Trump’s proposal, describing it as a veiled tax increase on American families and small businesses.
Trump has outlined specific tariff rates, such as a 10% tariff on global imports, a 25% tariff on imports from Canada and Mexico, and a 60% tariff on Chinese products.
Experts caution that these tariffs could disrupt trade flows, raise costs, and provoke retaliation against U.S. exports, further complicating the U.S. trade environment.
