Trump Vows to Create New Tariff Collection Agency

Trump
Reuters
By Yuval Rosenberg and Michael Rainey

Good evening! On this date way back in 1952, NBC's "Today" show first aired. The big show on Tuesday, though, was on Capitol Hill, where Pete Hegseth, President-elect Donald Trump's pick to lead the Pentagon, was grilled by Democrats about his qualifications for the job, or lack thereof. The hearing grew tense and testy at times, as Democrats plumbed the former Fox News host's job record as well as allegations about his character, past misconduct and controversial statements about diversity and the role of women in the military. But Republicans - including Sen. Joni Ernst, a key vote on the Armed Services Committee - appeared to line up in favor of Hegseth's confirmation, and the nominee appeared to make it through more than four hours of questioning without doing anything that would weaken GOP support.

Trump Vows to Create New 'External Revenue Service'

President-elect Donald Trump said Tuesday that he plans to create a new federal agency to collect tariffs and revenue from international sources.

"I am today announcing that I will create the EXTERNAL REVENUE SERVICE to collect our Tariffs, Duties, and all Revenue that come from Foreign sources," Trump wrote on his social media platform. "We will begin charging those that make money off of us with Trade, and they will start paying, FINALLY, their fair share."

The incoming president provided no further details on how the new agency would function or when it would start to operate, though it's unlikely to begin on January 20, Inauguration Day, as Trump suggested in his post, since it takes an act of Congress to create a federal agency. A fast start would be possible, however, if the new effort is simply a renaming or reorganization of offices within existing agencies.

Currently, a fee from a tariff - defined by the Congressional Research Service as "a tax levied on imported goods and services" - is typically collected by U.S. Customs and Border Protection at a port of entry, under regulations established by the Secretary of the Treasury, with the tariff level set by the White House and Congress.

Here's how the process of tariff collection currently works, according to a CRS overview of U.S. policy updated last month:

"When a good enters a U.S. port of entry, merchandise is classified and tariffs are assessed using the Harmonized Tariff Schedule of the United States (HTSUS), a compendium of tariff rates based on a globally standardized nomenclature. Today, importers self-classify and declare the value or quantity of their goods. CBP reviews the paperwork, performs occasional audits, and then collects any applicable tariffs or penalties as well as any administrative fees. Finally, CBP deposits any revenue from tariffs or other penalties into the General Fund of the United States."

A quest for revenue: While it's still not clear why a new federal agency would be needed to do the work currently handled by existing agencies, a lawyer with a group that supports Trump's push for higher tariffs told The Washington Post that it's a sign of how serious the incoming administration is about maximizing tariff revenues.

Or a PR ploy: Critics saw a different motive. Trump has repeatedly claimed that foreign manufacturers or countries pay tariffs, but they are in fact a tax on goods paid by importers, and the new agency could serve to obscure that fact. "This is clever marketing, but it doesn't change the fact that American consumers will end up paying these higher tariffs," said The Washington Post's Heather Long.

Deficit for Calendar Year 2024 Topped $2 Trillion

The Treasury Department said Tuesday that the deficit for December 2024 totaled $87 billion, bringing the total deficit for calendar year 2024 to just over $2 trillion. Outlays for the year came to $6.9 trillion, compared to $4.9 trillion in revenue. In calendar year 2023, outlays totaled $6.3 trillion and revenue was $4.5 trillion.

The budget gap for the first three months of fiscal year 2025 is nearly $711 billion, up from about $510 billion a year ago.

The deficit watchdogs at the nonpartisan Committee for a Responsible Federal Budget said the numbers provide more evidence that the fiscal picture is deteriorating, and they noted that the incoming Trump administration and new Congress will be faced with decisions that could result in trillions of dollars added to the deficit.

“There is absolutely no just justification for running a $2 trillion deficit in a year when the economy was strong and we were still fighting inflation,” CRFB President Maya MacGuineas said in a statement. “The bottom line is that 2025 is going to be full of consequential decisions for the federal budget. Competing interests and political expediency will tempt lawmakers to trade new spending for new or extended tax cuts, but with the debt headed for an all-time record in just two years and our major trust funds facing insolvency in less than eleven, they should work to avoid backsliding this year as they did last year.”

Quote of the Day

"The Department's view that the Constitution prohibits the continued indictment and prosecution of a President is categorical and does not tum on the gravity of the crimes charged, the strength of the Government's proof, or the merits of the prosecution, which the Office stands fully behind. Indeed, but for Mr. Trump's election and imminent return to the Presidency, the Office assessed that the admissible evidence was sufficient to obtain and sustain a conviction at trial."

− From Special Counsel Jack Smith's 174-page report summarizing his investigation into President-elect Donald Trump's efforts to overturn the results of the 2020 election.

Smith also wrote that claims that his prosecution or decision to bring charges were political are "laughable."

Trump fired back in a social media post criticizing Smith and the congressional committee that investigated the January 6, 2021, attack on the Capitol. "Jack is a lamebrain prosecutor who was unable to get his case tried before the Election, which I won in a landslide," Trump wrote. "THE VOTERS HAVE SPOKEN!!!"

Number of the Day: $770

President Joe Biden announced that the federal government will provide one-time payments of $770 to people affected by the Los Angeles wildfires.

"People impacted by these fires are going to receive a one-time payment of $770 - a one-time payment - so they can quickly purchase things like water, baby formula, and prescriptions. So far, nearly 6,000 survivors have registered to do just that and $5.1 million has gone out. And I encourage everyone who has been impacted to get assistance. Go to DisasterAssistance.gov or call 1-800-621-3362."

Californians can find out more about applying for aid here.

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