Trump’s ‘External Revenue Service’ plan signals his tariff ambitions, if nothing else

By Doug Palmer, Ari Hawkins | 01/15/2025 12:54 PM EST

Even if Donald Trump vastly expands the use of tariffs as president, it’s unlikely he’ll collect enough revenue to replace the more than century-old federal income tax system.

Donald Trump

President-elect Donald Trump has long insisted that China paid the cost of the tariffs he imposed during his first term — a point most economists refute. Spencer Platt/Getty Images

President-elect Donald Trump’s suggestion on Tuesday that he will create a counterpart to the Internal Revenue Service to ramp up tariff collections drew sharp criticism from a senior Democrat and applause from a business group that favors more protectionism.

It also created some consternation and amusement since the U.S. government already has an agency, U.S. Customs and Border Protection, that collects tariff revenue for the United States. 

“The only thing that changes under Trump’s idea is that to pay their customs duty, U.S. importers would make a check out to ‘U.S. External Revenue Service’ instead of U.S. Customs and Border Protection,” said Erica York, vice president of federal tax policy at the Tax Foundation.

Advertisement

It’s a sign, however, of just how serious Trump is about pursuing wide-ranging tariffs in his second term — not just as a bargaining chip with foreign countries, but as a central part of his entire economic agenda.

GET FULL ACCESS