In a recent announcement that has drawn significant attention, President-elect Donald Trump proposed the creation of a new federal agency named the ‘External Revenue Service.’ This agency is intended to specifically collect tariffs and duties from foreign countries as part of his broader economic strategy. The announcement was made via a post on his social media platform, Truth Social, reflecting Trump’s focus on boosting revenue for the United States through more aggressive foreign trade policies.
What is the External Revenue Service?
According to the proposal, the External Revenue Service will operate with the primary objective of collecting money from foreign nations. It aims to ensure that foreign entities pay what Trump describes as their “fair share.” In light of current trade agreements, which Trump has criticized as weak, the new agency hopes to make significant changes to how tariffs are handled within the country.
Tariff Plans Under the New Agency
Trump’s plans for tariffs are notably ambitious. He has suggested that the Initial tariffs might range from 10% to as high as 60% on imports from countries like China, with additional tariffs of 25% on goods from Canada and Mexico if certain conditions are not met. These conditions revolve around issues like drug flows and immigration, which Trump has long made central points in his political discourse. This new measure represents a significant shift in how tariffs would be collected compared to the current system, where U.S. Customs and Border Protection is responsible.
Political Backing and Budget Considerations
The establishment of the External Revenue Service would require approval from Congress. Although Republicans currently hold majorities in both houses, questions remain about the practicality of creating a new government entity that could overlap the existing functions of several federal agencies, including the Commerce Department and Customs. Critics express concern that this initiative could inadvertently lead to an increase in government size, contradicting Trump’s stated agenda of reducing the size of government.
Criticism Surrounding the Proposal
Not everyone is on board with this plan. Some economists warn that the introduction of higher tariffs could lead to increased costs for American families by causing inflation in the prices of goods. Senator Ron Wyden, a Democrat, condemned the proposed agency as a tax hike on hardworking Americans, underlining that tariffs ultimately burden consumers, particularly those with lower incomes.
Trump’s Broader Economic Agenda
This announcement relates closely to Trump’s broader ‘Save America’ agenda, which includes initiatives aimed at making the federal government more efficient. Interestingly, the Trump campaign is also considering the establishment of a Department of Government Efficiency (DOGE), which aims to reduce bureaucracy by cutting federal jobs and streamlining government functions. Individuals like Elon Musk and Vivek Ramaswamy are reportedly leading efforts within this new department to further these objectives, emphasizing a focus on efficiency and reduced government size overall.
Next Steps
As this plan develops, many are left wondering what the next steps will be and how it will all play out in Congress. The proposal has already generated discussions among political analysts and economic experts, who are watching closely to see how Trump’s vision for the External Revenue Service unfolds. For now, the country is marked by a mix of anticipation and skepticism about how these changes could shape the economic landscape in the coming years.
| Proposed Tariff Increases | Potential Impact |
|---|---|
| Import Tariffs on China | 60%+ |
| Import Tariffs on Canada and Mexico | 25% |
| General Import Tariffs | 10%-20% |
