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Trump's External Revenue

Recently, President-elect Donald Trump proposed creating a new agency called the External Revenue Service (ERS) to manage tariffs, duties, and foreign-sourced revenue. The idea behind the ERS is to shift more of the U.S. tax burden to foreign trade partners, with the goal of reducing taxes on American businesses and families.

The announcement comes as part of Trump’s ongoing focus on trade policies and addressing the U.S. trade deficit. However, the details of how the ERS would operate—and how it would interact with existing agencies like U.S. Customs and Border Protection—are still unclear.

What Is the Purpose of the ERS?

According to Trump, the ERS would ensure that foreign entities doing business in the U.S. are contributing their share of revenue through tariffs and other duties. The goal is to reduce the financial burden on U.S. taxpayers by generating more revenue from international trade.

The idea aligns with Trump’s broader economic strategy to rework trade agreements and boost domestic industries. Supporters see it as a way to strengthen U.S. trade policies and protect American jobs.

Concerns and Questions Raised

Critics of the proposal have raised concerns about how the ERS would impact both businesses and consumers. Some economists worry that increased tariffs on foreign goods could lead to higher prices for everyday items in the U.S. Others are concerned about potential trade tensions with foreign countries.

On the other hand, supporters argue that by increasing tariffs, the U.S. can level the playing field in global trade and encourage more domestic production.

What Does This Mean for Business Owners?

For business owners—especially those involved in import/export—the creation of the ERS could lead to changes in tariffs and trade policies. These changes may impact pricing, supply chains, and overall costs of goods. It’s important to stay informed on any regulatory shifts to prepare for potential impacts.

Whether the ERS will be implemented or how it will function remains to be seen, as new agencies typically require legislative approval. As with any proposed policy, it’s essential to watch for updates to understand how it may affect your business or personal finances.

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