Trump Announces Creation of External Revenue Service to Collect Tariffs and Duties

President-elect Donald Trump has announced the creation of an External Revenue Service (ERS) that will be tasked with collecting tariffs, duties, and all revenue generated from foreign sources. Trump confirmed the plan on Tuesday, January 14, through a post on his Truth Social network, where he declared that the ERS would officially begin operations on January 20, 2025.

“I am today announcing that I will create the ERS to collect our tariffs, duties, and all revenue that come from foreign sources,” Trump stated. “We will begin charging those that make money off of us with trade, and they will start paying, finally, their fair share.”

Trump criticized the current reliance on the Internal Revenue Service (IRS) and domestic taxation to fund the U.S. economy. “For far too long, we have relied on taxing our great people using the Internal Revenue Service,” he said. “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.”

This announcement aligns with earlier ideas floated by Trump, including a proposal in June to implement an “all tariff policy” that would shift the country’s revenue generation away from income taxes. Sources previously told CNBC that such a policy could pave the way for eliminating income taxes entirely by focusing on revenue from import tariffs.

Trump has also proposed imposing steep tariffs on imports from several countries, with a notable 60% tariff on goods from China. This approach underscores his broader economic strategy of using trade policies to balance revenue and address what he sees as inequities in international trade relationships.

Tax experts have highlighted that the success of Trump’s tax reforms will heavily depend on Congress and its willingness to support such initiatives. Trump’s plans for a second term have included a sharp focus on tax restructuring, including a long-standing goal of reducing the U.S. corporate tax rate to 15%.

As Trump prepares to assume office, the creation of the ERS marks a significant step in his vision of reshaping how the U.S. collects revenue, prioritizing foreign trade as a central pillar of his administration’s economic agenda. Whether these policies will gain traction remains to be seen, as their implementation will depend on legislative approval and potential impacts on international trade relations.

By fLEXI tEAM