Trump plans ‘External Revenue Service’ for tariffs paid by US importers
Doug Holtz Eakin, former director of the Congressional Budget Office, explains the impact of tariffs on Canada’s economy and shares his thoughts on President-elect Trump’s agenda and the House Speaker’s vote.
President-elect Trump It announced plans on Tuesday to create a new Foreign Revenue Service to collect revenue from tariffs, but economists pushed back, saying US importers bear the brunt of the cost of tariffs, not foreign companies.
“For too long we have relied on the Internal Revenue Service (IRS) to tax our Big People. Through soft and pathetically weak trade agreements, the American economy has provided growth and prosperity to the world while taxing ourselves. It’s time. for that to change,” Trump wrote in a post published on the Truth Social platform.
“I announce today that I will create FOREIGN REVENUE SERVICE to collect our Tariffs, duties and all revenue that comes from foreign sources. We will start charging those who earn money from us, Finally, January 20, 2025 will be the birthday of the Foreign Revenue Service day,” he added.
Tariffs are import taxes that are often paid by the importer to the U.S.-based federal agency, U.S. Customs and Border Protection (CBP). That dynamic has drawn opposition from economists who say the proposed Foreign Revenue Service name represents an effort to: to hide who pays for the rates.
TRUMP REJECTS NOTICE OF TARIFF CHANGES
President-elect Trump has announced that he plans to create a “Foreign Revenue Service” to collect tariffs paid by US importers. (Bill Pugliano/Getty Images/Getty Images)
“The president-elect may try to market his high-tariff agenda as a foreign tax, but the messaging doesn’t change that. higher rates people and businesses in the United States who import goods will pay,” Tax Foundation Vice President Erica York told FOX Business.
“Tariffs are not foreign revenue, they are taxes on US importers that reduce both the US economy and US incomes. Higher tariffs will hurt the US economy and threaten to offset the benefits of tax cuts elsewhere, they should not be counted on.” as a primary source tax revenueYork explained.
President-elect Trump, seen here with Canadian Prime Minister Justin Trudeau, who recently announced his resignation, campaigned on imposing tariffs on US trading partners. (Dan Kitwood/Getty Images) / Getty Images)
Scott Lincicomi, vice president of general economics at the Cato Institute, echoed this sentiment and told FOX Business: “The agency’s name is more branding than substance, and misleading branding at that. In the vast majority of cases, the parties are in the United States — not foreign (“foreign”) sources — paying the U.S. duties, and as confirmed by several. according to the latest studies, also bear their economic phenomenon”.
“Declaring tariff revenue ‘foreign’ would therefore be as misleading as, say, declaring domestic sales tax revenue ‘foreign’ because it was a foreign-made product sold at your local Walmart. After all, Trump can.” called it the “Foreigners Pay Tariff Agency,” and it still doesn’t change the fact that Americans really are,” Lincicomi said.
GOLDMAN SACHS. TARIFFS MAY BE ADJUSTED
Tariffs are paid by importers to US Customs and Border Protection at the point of entry into the country, in most cases. (Photo by Luc Charette/Bloomberg/Getty Images/Getty Images)
During his successful campaign to return to the White House, Trump announced plans to impose a blanket tariff of 10% or 20%, as well as a higher tariff of 60% on goods. imported from China.
He also threatened to impose a 25% tariff on goods from Canada and Mexico, both of which are CIS participants. US-Mexico-Canada Agreement (USMCA) – a free trade agreement that Trump negotiated in his first term as the successor to the North American Free Trade Agreement (NAFTA).
To him campaign platform included tariff revenue as a source of tax revenue to offset proposed tax cuts and spending plans.
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Trump will be inaugurated for his second term as president on Monday, January 20. His transition team has announced that he plans to sign a document. executive orders after taking office, as the new presidential administration often does.
Trump’s social media post suggests that the Internal Revenue Service will be created Inauguration Dayalthough the details of whether this will be done via executive order and how the new agency plans to operate are unclear at this time.
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