Donald Trump has unveiled a bold proposal to establish an "external revenue service" dedicated to collecting tariffs on foreign imports. This new agency is intended to begin operations on January 20, 2025, coinciding with Trump's anticipated return to the White House. The proposal marks a significant shift in the United States' approach to revenue collection and trade policy. Trump has pledged that the creation of this service would be among a series of executive orders he plans to issue on his first day back in office.
Currently, the responsibility for collecting tariffs on foreign imports lies with the US Customs and Border Protection agency, which operates under the Department of Homeland Security. However, Trump envisions placing the new service under the jurisdiction of the Treasury Department. This shift aligns with Trump's broader economic strategy, which includes imposing tariffs on imports from major trading partners such as Canada, Mexico, and China. These actions are part of his intention to protect the US market and American citizens from unfettered foreign access.
"For far too long, we have relied on taxing our great people using the Internal Revenue Service (IRS)," – Donald Trump
This statement underscores Trump's recurring suggestion of abolishing income tax in favor of tariffs as the primary source of government revenue. The proposed import taxes could range from 10% to 20% on all foreign goods. Trump advocates for these changes by arguing that the American economy has historically fueled global growth while bearing its tax burden.
"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." – Donald Trump
Steve Bannon, Trump's ally and former White House adviser, has echoed these sentiments by suggesting that the new service should alleviate the burden on citizens imposed by the Internal Revenue Service.
"I am today announcing that I will create the EXTERNAL REVENUE SERVICE to collect our Tariffs, Duties, and all Revenue that come from Foreign sources," – Donald Trump
Despite these ambitious plans, many economists have expressed concern over the potential inflationary effects of imposing tariffs. They caution that such measures could lead to increased costs for consumers and disrupt established trade relationships. Nonetheless, Trump remains steadfast in his vision of transforming America's economic landscape through protective trade policies.