Trump Plans New ‘External Revenue Service’ To Shift Tariff From Americans To Foreign Sources

President-elect Donald Trump announced plans to create a new government agency, the External Revenue Service, to collect tariffs, duties, and other revenues from foreign sources. The new department, scheduled to launch on January 20, the day of his second inauguration, aims to reduce the tax burden on Americans by shifting the responsibility for revenue collection to foreign entities.

In a post on Truth Social, Trump attacked current trade deals for enriching the world’s economies while getting the American people financially outspent. He said it was time to end that and announced his plan to make foreigners finally pay their fair share via tariffs and trade-related taxes while making this new agency collect the revenue that, according to Trump, would turn the tables so that America’s financial burden is no longer borne by its citizens.

It was still not known how the External Revenue Service would function. There was no guarantee that it would supplant processes for collecting existing tariffs handled by US Customs and Border Protection or exactly how it would interact with the Internal Revenue Service. The issue of its possible tendency to increase the government bureaucracy has also arisen given Trump’s prior announcement to consolidate the government bureaucracy.

The announcement comes after Trump has previously mulled swapping US income taxes for tariff revenue. Economists, however, have questioned the feasibility of the idea, noting that a 20% tariff on all imports would raise just a fraction of what would be needed to replace the current income tax system.

The bill was sharply attacked by Democratic Oregon Senator Ron Wyden, who said the legislation would create an enormous tax on American families and businesses, which would directly favor the wealthy. Trade experts, too, questioned the tariff plans proposed by Trump in regard to their potential impacts on trade flows, exports, and economic stability of the US.