President-elect Donald Trump announced on January 15, 2025, that he will create a new government agency called the “External Revenue Service” to implement his tariff policy. This initiative aims to revive the U.S. manufacturing industry by making imports more expensive and generating revenue from foreign trade. In a post on Truth Social, Trump criticized the reliance on the Internal Revenue Service (IRS) to tax Americans, asserting that the country has long supported global prosperity at its own expense. The new agency will collect tariffs and duties on foreign imports, marking a shift in how the U.S. handles trade.
Imposing tariffs was a central part of Trump’s campaign platform, with proposals for a 10 to 20 percent tax on all imports. His administration is expected to leverage tariffs, especially on nations like China, as a bargaining tool in future trade negotiations. Trump has also suggested using tariffs on Canada and Mexico, linking the issue to concerns about border security and illegal immigration, despite objections from leaders in both countries.
Trump’s plan is aimed at boosting U.S. manufacturing, reducing trade deficits, and creating jobs, particularly in industries like agriculture, automotive, and lumber. However, critics warn that tariffs would drive up prices for American consumers, especially those already facing inflation. They argue that while tariffs might reduce dependence on foreign goods, they could also harm American businesses and export markets.
Despite the concerns, some supporters view tariffs as a way to bring more production back to the U.S. and strengthen the economy by ensuring that foreign nations contribute more to the American economy through trade.
