President-elect Donald Trump said he would establish a new federal agency called the External Revenue Service (ERS), which will collect tariffs and other revenues from foreign nations. This proposal was revealed on his social media platform Truth Social and indicates a big move toward his economic agenda in his second term.
“We will start charging those that make money off of us with trade, and they will start paying,” Trump said. He compared the ERS to the Internal Revenue Service but noted that the former is concerned with international trade revenue.
The ERS would need congressional approval, but that might be easier because of the new Republican majority in both chambers. However, a concern is that the ERS would serve as a government function duplicate; currently, that role is divided between the Commerce Department and Customs and Border Protection. Critics charge that the agency could make the federal government operate more confusingly rather than smoothly.
Trump has named business magnates Elon Musk and Vivek Ramaswamy to head the Department of Government Efficiency, a nongovernmental task force to reduce federal workforce, programs, and regulations. The DOGE initiative fits Trump’s broader “Save America” agenda: to shrink government operations.
At the heart of Trump’s economic policy is steep tariffs. He has suggested that tariffs as high as 25% should be applied to goods from friends, such as Canada and Mexico, and up to 60% on imports from China. Though Trump touts tariffs to bolster domestic industries and decrease trade deficits, economists sound warnings of what might be in store. Critics say higher tariffs will push up consumer prices and place an additional burden on American families and small businesses.
Sen. Ron Wyden, the ranking Democrat on the Senate Finance Committee, attacked the proposal as a “multi-trillion-dollar tax hike on American families” dressed up in “silly rebranding.”
The ERS proposal is emblematic of Trump’s efforts to redefine the nation’s economic policies, but its long-term viability and impact on the economy are topics of debate as the nation heads into his second term.
