Trump plans new agency to collect tariffs instead of taxes

President Donald Trump plans to launch a new agency called the "External Revenue Service." This agency aims to collect tariffs and duties to help lower taxes for Americans. During a recent cabinet meeting, Commerce Secretary Howard Lutnick expressed excitement about this initiative, calling April 2 "America's Liberation Day." However, it's unclear if the agency will start operations on that date. The Trump administration believes that this new agency will support Trump's trade policies and speed up tariff collection. They argue that the additional revenue will contribute to eventually abolishing the Internal Revenue Service (IRS), which currently manages federal tax collection. Trump announced that the External Revenue Service would manage "all tariffs, duties, and revenues," focusing on charging foreign entities that profit from U.S. trade. Currently, U.S. Customs and Border Protection is responsible for collecting tariffs. It is not yet clear if the new agency will take over these duties. During a Fox News interview, Lutnick indicated the ultimate goal is to replace the IRS with the External Revenue Service. However, some economists have expressed skepticism, noting the large difference between revenue from tariffs and income taxes. Critics argue that establishing the External Revenue Service could be impractical. They point out that there is already a system in place for collecting tariffs and that high tariffs could harm the economy. Meanwhile, April 2 will also see the start of President Trump’s reciprocal tariffs against countries that impose tariffs on the U.S.