Backlash against Trump's newly launched External Revenue Service
During his inaugural address on Monday, US President Donald Trump revealed the creation of a new government department named the External Revenue Service, which will be responsible for collecting "tariffs, duties and revenue." However, critics argue that this new department will lead to increased tax burdens for American citizens.
Heather Long, an economic analyst and columnist for The Washington Post, expressed her thoughts on the matter via social media platform X prior to the announcement. She stated, "This is clever marketing, but it doesn't change the fact that American consumers will end up paying these higher tariffs." Long highlighted that the US already has a department, specifically the US Customs and Border Protection, responsible for collecting tariffs and duties.
Further questioning the initiative, Richard Mojica, a customs lawyer at Miller & Chevalier, pointed out the confusion surrounding Trump's statement that the External Revenue Service "would collect duties and tariffs ‘that come from foreign sources’ – a term that nobody understands." Mojica remarked to The New York Times, "I don't see how the E.R.S. could collect tariff payments from a foreign manufacturer who is not also the US importer of record."
Democratic Senator Ron Wyden of Oregon, a senior member of the Senate Finance Committee, asserted that Trump's tax proposals would negatively impact average Americans while benefiting the wealthy. "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," he stated.
In his announcement on Monday, Trump pledged to initiate reforms to the trade system to safeguard American workers and families. He claimed, "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."
Since Trump's inauguration, the US has begun targeting its largest trading partners with new tariffs. On February 1, Trump signed several executive orders, including a 25 percent tariff on imported goods from Canada and Mexico.
In response, Canada's Prime Minister Justin Trudeau warned that his country would take action if Trump proceeded with tariffs on Canada, emphasizing that "everything is on the table." He added, "We will defend Canada, our workers, our businesses, our economy and our sovereignty."
Allen M Lee for TROIB News