President-elect Donald Trump announces plans for an “External Revenue Service” to collect tariffs and duties from foreign sources, shifting away from domestic taxation.
At a Glance
- Trump plans to establish an “External Revenue Service” on January 20, 2025
- The new agency aims to collect tariffs, duties, and revenue from foreign sources
- Proposed tariffs include 10% increase on Chinese imports, 25% on Canadian and Mexican products
- Economists argue that U.S. importers and consumers will bear the cost of higher tariffs
- Trump considers declaring a national economic emergency to facilitate new tariffs
Trump’s Vision for External Revenue Service
President-elect Donald Trump has unveiled plans to create an “External Revenue Service” (ERS) as part of his economic strategy for his upcoming term. The new agency, set to be established on January 20, 2025, coinciding with Trump’s second inauguration, aims to shift the focus of revenue collection from domestic taxation to international trade.
He’s already talked about replacing income tax with tariffs – and this could be the start!
Trump’s announcement marks a significant departure from the current system where U.S. Customs and Border Protection handles tariff collection. The president-elect has been vocal in his criticism of the Internal Revenue Service (IRS) and what he perceives as weak trade agreements that have benefited other nations at the expense of the American economy.
The proposed tariff structure under the External Revenue Service includes a 10% increase on imports from China and 25% fees on products from Canada and Mexico. Trump argues that these measures will ensure foreign entities pay their fair share and support his broader economic agenda, including tax cuts and spending plans.
“Through soft and pathetically weak trade agreements, the American economy has delivered growth and prosperity to the world, while taxing ourselves. It is time for that to change,” Trump said.
That’s leadership!
However, economists and trade experts have raised concerns about the potential impact of these tariffs on the U.S. economy. They argue that higher tariffs could lead to increased costs for American consumers and businesses, potentially undermining the perceived benefits of the broader tax reform strategy.
We’ll certainly see…
Legal and Political Considerations
While federal law allows presidents to adjust tariffs for national security reasons or to address unfair trade practices, the broad-based nature of Trump’s proposed tariffs may face legal challenges. The president-elect’s team has directed inquiries to his post on Truth Social for more details, indicating that the plan is still in development.
As the debate over the External Revenue Service continues, it remains to be seen how this bold economic strategy will unfold and what impact it will have on American consumers, businesses, and international trade relations. The coming months will likely see intense scrutiny and discussion of this proposed shift in U.S. economic policy.
We just know that Democrats will do all they can to stop this.
