Trump says he will create an ‘External Revenue Service’ agency to collect tariff income

President-elect Donald Trump speaks during a meeting with Republican governors at Mar-a-Lago, Thursday, Jan. 9, 2025, in Palm Beach, Fla. THE CANADIAN PRESS/AP-Evan Vucci (Evan Vucci/AP)

WASHINGTON (AP) — President-elect Donald Trump on Tuesday announced plans to create a new agency called the External Revenue Service to collect tariffs and other revenues from foreign nations.

“We will begin charging those that make money off of us with Trade, and they will start paying,” Trump said Tuesday on his social media site, Truth Social. He compared his planned creation to the Internal Revenue Service, which is the nation’s domestic tax collector.

The creation of a new agency requires an act of Congress, and Republicans hold the majority of both the House and the Senate.

Trump, who has vowed to shrink the size of government, would be creating a new agency to do functions already handled by existing agencies, including the Commerce Department and the U.S. Customs and Border Protection, which collect duties and revenues from other nations.

The president-elect has tapped two business titans to lead his Department of Government Efficiency, or DOGE, a nongovernmental task force assigned to find ways to fire federal workers, cut programs and slash federal regulations, all part of what he calls his “Save America” agenda for a second term in the White House.

Billionaire Elon Musk and fellow entrepreneur Vivek Ramaswamy are leading the DOGE’s ambitious efforts to reduce the size and scope of the federal government.

Tariffs, with the threat of a potential 25 per cent levy on all goods from allies like Canada and Mexico and 60 per cent on goods from China, have become a benchmark of Trump’s economic agenda as he heads into his second term.

Economists have said the cost of the tariffs will be passed on to consumers, and are generally skeptical of them, considering them a mostly inefficient way for governments to raise money and promote prosperity.

Democratic lawmakers were quick to criticize the External Revenue Service plan.

“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 pay for another round of tax handouts to the rich,” Oregon Sen. Ron Wyden, the top Democrat on the Senate Finance Committee, said in a statement.