Introducing the External Revenue Service: Trump’s Bold Approach for International Trade 

In a significant move aimed at reshaping the landscape of international trade, President Donald Trump has announced the creation of a new government agency, the External Revenue Service (ERS). This agency is designed to collect tariffs and other duties from foreign nations, marking a pivotal shift in how the U.S. manages its trade revenues. 

ERS Highlights: 

• Operational Impact:  While this is breaking news, it is not entirely clear how the ERS will function alongside existing agencies like the U.S. Customs and Border Protection (CBP) and the Commerce Department, which currently handle tariff collection. 

• Revenue Collection: The ERS will be responsible for collecting tariffs and duties from foreign entities, ensuring that countries benefiting from trade with the U.S. contribute their fair share. 

• Economic Strategy: By imposing tariffs, the ERS aims to protect domestic industries and promote fair trade practices. This move is expected to generate significant revenue, which can be reinvested into the U.S. economy. 

• Government Efficiency: The establishment of the ERS aligns with Trump’s broader agenda to streamline government operations. The Department of Government Efficiency, led by business leaders Elon Musk and Vivek Ramaswamy, will oversee this initiative. 

• International Businesses: For domestic and international companies engaged in international trade, expected impacts could include increased costs, operational adjustments and regulatory compliance.  Increased tariffs and duties could lead to higher prices for products in the U.S. market.  Additionally, companies might need to adjust their supply chains and sourcing strategies to mitigate the impact of higher tariffs. 

The establishment of the ERS means a new layer of compliance and reporting requirements.  Aprio can help individuals and companies stay informed about the latest tariff regulations and ensure accurate reporting while remaining compliant and competitive and avoid penalties. 

For more detailed guidance on how the ERS might impact your business, please contact Yelena Epova, Partner – International Practice Leader or Jay Cho, Tax Director – Tariffs and Customs.