• Donald Trump plans to create an "External Revenue Service" specifically for collecting tariffs from foreign entities as part of his trade policy.
• The initiative will be enacted on January 20, 2025, coinciding with Trump’s inauguration as president.
• The proposed service aims to alleviate reliance on the Internal Revenue Service for government funding, focusing instead on revenue from tariffs.
• Trump's tariff proposals include significant increases on imports from Canada, Mexico, and China, potentially impacting U.S. consumer prices.

President-elect Donald Trump has unveiled plans to establish an "External Revenue Service" to oversee the collection of tariffs from foreign sources, as announced on his platform Truth Social. This service is intended to replace the existing model where U.S. Customs and Border Protection (CBP), part of the Department of Homeland Security, currently handles tariff collections. Trump articulated that the service would begin operations on January 20, 2025, marking its launch on the first day of his presidency. He emphasized that the new agency would facilitate the collection of Tariffs, Duties, and all Revenue from foreign dealings, asserting that it is time for foreign entities to contribute fairly to the American economy.

In his statement, Trump criticized the long-standing reliance on the Internal Revenue Service, alleging it has overburdened American taxpayers. He mirrored sentiments expressed earlier by political allies like Steve Bannon, who highlighted a broader framework for generating federal revenue through fees and tariffs rather than traditional taxation strategies. Trump’s plan includes imposing tariffs ranging from 10% to 20% on various imports and even a staggering 60% on goods from China, aimed at reviving U.S. manufacturing and ensuring that foreign trade partners "finally pay their fair share” (The Hill).

However, economic analysts have raised concerns regarding the implications of such tariffs on the cost of goods within the U.S. market. Historical evidence suggests that tariffs often lead to increased consumer prices, as importers typically pass the costs onto American shoppers. According to reports, Trump's earlier tariffs during his first term resulted in noticeable price hikes on certain consumer goods, bringing scrutiny from economists who caution against his aggressive trade strategies.

The announcement of the External Revenue Service, whether it gains traction within the governmental structure, reflects a significant shift in Trump's economic strategy, as he positions himself to exert a stronger hand in international trade. As Trump steps back into office, the potential for widespread changes in U.S. trade policy looms large, with immediate repercussions for relations with key trading partners, particularly Canada, Mexico, and China.

For more details, refer to the article from Salon, The Hill, Business Insider, and The Guardian.