President-elect Donald Trump has unveiled plans to establish a new federal agency, the External Revenue Service (ERS), to handle tariffs, duties, and foreign revenue. The announcement, made on his social media platform Truth Social, signals Trump’s commitment to reshaping U.S. trade policy as he prepares to take office on January 20, 2025.
The ERS aims to centralize the collection of revenue from imports, an area currently managed by agencies like U.S. Customs and Border Protection (CBP), the Commerce Department, and the U.S. Trade Representative (USTR). Trump stated that the agency’s creation would ensure other countries “pay their fair share” while addressing what he described as the weaknesses of past trade agreements.
“Through soft and pathetically weak trade agreements, the American economy has delivered growth and prosperity to the world while taxing ourselves,” Trump wrote. “It is time for that to change. January 20, 2025, will be the birth date of the External Revenue Service. MAKE AMERICA GREAT AGAIN!”
Trump’s proposed tariffs include a 25% duty on all goods from Mexico and Canada, a 10% tariff on all imports, and rates as high as 60% on Chinese products. While the ERS would be tasked with collecting these tariffs, trade experts question whether the new agency will streamline operations or duplicate existing responsibilities.
Currently, the CBP enforces tariff policies, depositing revenue into the General Fund of the United States. Critics argue that the creation of the ERS may complicate a system already in place, adding another layer of bureaucracy without clear benefits.
Economists have warned that higher tariffs often result in increased costs for American consumers, as importers pass additional expenses onto buyers. “Tariffs are taxes, and those taxes are paid by American consumers and businesses,” said an economist from the Tax Foundation. “The proposed tariffs could lead to higher prices for everyday goods and trigger retaliatory actions from trade partners.”
Trump’s use of tariffs during his first term as president was a cornerstone of his trade policy, particularly targeting China for intellectual property theft and unfair practices. While some tariffs remained under the Biden administration, the current president collected more revenue through tariffs overall, with $144 billion in revenue compared to $89.1 billion under Trump.
Trump’s announcement comes as the U.S. economy grapples with inflation concerns and global trade tensions. Critics worry that sweeping tariff policies could exacerbate inflation and harm American exporters by prompting retaliatory measures from other nations.
The establishment of the ERS would likely require congressional approval, along with significant financial and logistical resources. While Trump’s supporters view the agency as a bold step toward reclaiming American economic sovereignty, opponents see it as unnecessary and potentially redundant. The proposed tariffs also face scrutiny for their potential to impact low-income households disproportionately, as higher prices on goods would be felt most acutely by those with limited financial resources.
Trump’s announcement reflects his broader vision of prioritizing American interests in global trade. The ERS proposal underscores his commitment to challenging traditional trade practices and reshaping the global economic order. However, the plan has sparked debate among policymakers, economists, and trade experts about its feasibility and potential impact.
As Trump prepares to take office, the announcement of the ERS has reignited discussions about tariffs, trade, and the role of government in economic policy. Whether the ERS becomes a transformative initiative or a controversial footnote remains to be seen. For now, Trump’s bold vision for U.S. trade has once again placed tariffs at the center of political and economic debate.