External Revenue Service: Donald Trump now wants to create a new agency to collect revenue from foreign sources

US President-elect Donald Trump on Tuesday announced plans to establish a new government agency, the External Revenue Service (ERS), tasked with collecting tariffs, duties, and other revenues from foreign sources. The announcement comes as Trump prepares to implement new import tariffs ahead of his second-term inauguration on January 20.

In a Truth Social post, Trump criticized the Internal Revenue Service (IRS) and claimed Americans have been taxed unfairly for too long. He promised the ERS would begin operations on his first day in office.

"Through weak and pathetic trade agreements, the American economy has delivered growth and prosperity to the world while taxing ourselves. It’s time for that to change," Trump wrote. "We will begin charging those that profit off of us through trade, and they will FINALLY pay their fair share."


Uncertainty Surrounding the New Agency
The specifics of the ERS’s operations remain unclear. Trump did not clarify whether the new agency would take over the collection of tariffs, duties, and fines currently managed by U.S. Customs and Border Protection or the taxation of foreign corporate and individual income handled by the IRS.

It’s also uncertain whether this initiative would create additional bureaucracy, potentially conflicting with Trump’s "Department of Government Efficiency," an informal effort led by Elon Musk and Vivek Ramaswamy to streamline government operations and cut trillions in spending.

A spokesperson for Trump’s transition team was unavailable to provide further details.

Economic Viability Questioned
Trump has previously floated the idea of replacing U.S. income taxes with tariff revenue, though experts have consistently raised doubts about its feasibility.

The Tax Foundation, a conservative think tank, estimates that a 20% universal tariff on all U.S. imports would generate $4.5 trillion over 10 years but would drop to $3.3 trillion after accounting for negative economic effects. This figure is far below the $16-18 trillion collected annually by the IRS.

Trump’s proposed tariffs include:

10% tariff on all global imports.
25% punitive duty on imports from Canada and Mexico until stricter measures are taken to control drug and migrant crossings.
60% tariff on Chinese goods.

Criticism and Potential Consequences
Senator Ron Wyden, the top Democrat on the Senate Finance Committee, criticized Trump’s proposal, calling it a disguised tax hike.

"No amount of silly rebranding will hide the fact that Trump is planning a multi-trillion-dollar tax hike on American families and small businesses to fund another round of giveaways for the rich," Wyden said.

Trade experts warn that such tariffs could disrupt global trade flows, increase costs for consumers, and trigger retaliatory measures against U.S. exports.