President Trump wants an External Revenue Service to collect tariffs on imports. One trade expert said the move may be “more branding than substance.”The New York Times reports that President Trump has pledged to generate a significant amount of revenue through tariffs on foreign products, so much so that he plans to create a new agency called the External Revenue Service to handle the collection of these funds.
During his inaugural address, Mr. Trump stated, “Instead of taxing our citizens to enrich other countries, we will tariff and tax foreign countries to enrich our citizens. It will be massive amounts of money pouring into our Treasury coming from foreign sources.” However, many details about this proposed agency are still unclear, including how it would differ from the current operations of the government. Trade experts believe that despite the name “external,” the majority of tariff revenue will still be collected from U.S. businesses that import products.
The United States already has an established system for collecting tariffs, which is currently managed by U.S. Customs and Border Protection. This agency monitors goods and people entering the country through various airports and land crossings. The Customs Service was established in 1789 as part of the Treasury Department, and for many years, tariffs were the main source of government revenue. However, with the introduction of income tax in 1913, tariffs became a minor source of income. After the September 11th attacks, the customs bureau was moved from the Treasury Department to the Department of Homeland Security.
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