President-elect Donald Trump has announced his intention to establish a new agency, the 'external revenue service,' on his first day in office to collect tariffs and other revenue from foreign sources. This move signals a continued focus on protectionist trade policies that were a hallmark of his previous presidency.
Incoming President Donald Trump announced on Tuesday his intention to establish a new agency dedicated to facilitating his tariff proposals on his first day in office. Trump took to his social media platform, Truth Social, stating that he would create an ' external revenue service ' responsible for 'collecting our Tariffs , Duties, and all Revenue that come from Foreign sources.' He asserted that this new agency would be operational starting January 20, the day of his inauguration.
'For far too long, we have relied on taxing our Great People using the Internal Revenue Service (IRS),' Trump declared. '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.' Although Trump's vision for the external revenue service remains unclear, establishing a new government agency necessitates congressional approval. Trump has consistently championed broad tariffs throughout his campaign. During his presidential run, he called for imposing a 60% tariff on goods imported from China, along with tariffs ranging from 10% to 20% on all other imports. He later escalated his threats against foreign nations, vowing to impose further tariffs on Canada and Mexico if they failed to curb immigration and drug trafficking. He also warned of additional tariffs on BRICS nations unless they pledged not to create a competing currency that would challenge the US dollar's dominance. Trump's transition team has yet to provide Business Insider with any additional details regarding the external revenue service. The US Customs and Border Protection (CBP) currently collects revenue for the US by enforcing trade laws. According to CBP data, the agency collected $3.35 trillion in import revenue during the fiscal year 2022. It remains unclear how the external revenue service would interact with or differ from the CBP's existing functions. Earlier on Tuesday, Steve Bannon, a former Trump White House advisor, publicly endorsed the creation of an external revenue service as part of his wish list for Trump's first 100 days in power. Bannon, echoing Trump's sentiments, has advocated for a return to an era where the US government relied more heavily on tariff fees to finance its operations. 'You wouldn't just look at tariffs, you would look at everything about how you can charge fees, essentially, whether that is on investment, access to this country,' Bannon stated during an event focused on Trump's first 100 days. 'America is behind the golden door. This market is the most robust, lucrative market in the world, and we shouldn't just let people have access it — we shouldn't let foreigners have access to this market and to the American people and to the American citizens for free.'Trump has consistently dismissed concerns that raising tariffs would lead to increased consumer prices. Studies analyzing the impact of Trump's first-term tariffs revealed that tariffs did contribute to higher prices for goods such as washing machines. Allies are likely to retaliate with their own tariffs, mirroring the pattern observed during Trump's first term in office. Numerous economists and trade experts predict that Trump's broader tariff proposals could exert a more substantial impact on the economy and consumers compared to his initial term. The nonpartisan Peterson Institute, for example, estimated that Trump's proposed 60% tariff on Chinese imports could elevate inflation by 0.4 percentage points in 2025
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