With just days to go before Donald Trump’s second inauguration, talk continues about whether the newly elected president will make good on his trade tariff threats. Of course, the Republican addressed the issue before his re-election. And yes, he gets offered a lot of blunders. But when push comes to shove, some continue to suggest, Trump may not pull the trigger on a misguided plan that would undermine the economy.
It was against this backdrop that the President-elect made an announcement of sorts via his social media platform:
For far too long we have relied on taxing our Great People through the Internal Revenue Service (IRS). Through soft and pathetically weak trade deals, the American economy has brought growth and prosperity to the world while taxing ourselves. It’s time for that to change. I am announcing today that I will establish the EXTERNAL REVENUE SERVICE to collect our rates, duties and all revenues from foreign sources. We will start charging those who make money from us through Trade, and they will FINALLY start paying their fair share. January 20, 2025 will be the date of birth of the External Tax Authorities.
Before we delve into this further, it’s worth taking a moment to remember the maxim ‘watch what they do, not what they say’. Some reports over the past 24 hours indicated that Trump is creating a new bureaucracy that will run parallel to the IRS, citing his online post. The problem is, there’s no way to know whether the Republican will actually try to create an External Revenue Service, or whether this will soon be added to the long list of ideas he seems equally enthusiastic about, only to never to speak of again.
But for the sake of conversation, let’s just say that Trump was serious about his latest plan. Let’s assume that next week the new Republican Party administration will actually have a new layer of bureaucracy focused solely on collecting foreign money coming into the United States, thanks in part to its plans to implement new tariffs.
What’s wrong with this? Actually, a little bit.
For starters, the idea of ​​an “External Revenue Service” seems like a clumsy attempt at political packaging: the president-elect has long struggled to understand the basics of trade policy, and he apparently continues to believe that tariffs will generate enormous wealth. that will flow into the state treasury.
As he really should know by now, it is American consumers, not foreign sources, who would pay more as a result of Trump’s policies.
But even putting this aside, a much more glaring problem emerges: Trump seems determined to create a new bureaucracy that is completely unnecessary, because the United States already has an agency responsible for collecting foreign revenues. The President-elect has probably heard of it: US Customs and Border Protection is already doing what the External Revenue Service would supposedly do.
The Washington Post reported that Trump’s announcement “created immediate confusion about how such an office would work in practice.”
U.S. Customs and Border Protection currently implements tariff policy, which is established by the President and Congress. According to the Congressional Research Service, importers self-classify and declare the value of their goods. CBP officials review and verify that paperwork before collecting fees, fines and fees. These funds are deposited into the U.S. General Fund, administered by the Treasury Department. The government will collect about $80 billion in tariffs and fees by 2023, according to a White House estimate.
Does Trump know this? Did he think about this for a moment before making the announcement? Did it occur to him that perhaps he could ask someone who actually knows something about the matter?
Unfortunately, I think we know the answers to these questions.
This article was originally published on MSNBC.com
