Trump's 'External Revenue Service' plan will strike fear into countries doing business with US, economist says
Published On Jan 16, 2025, 10:23 AM
President-elect Trump has announced the creation of a new agency named the 'External Revenue Service' (ERS), aimed at collecting tariffs and other revenues from foreign businesses and countries. This proposal is being praised by economic experts, who highlight that it could instill fear in foreign entities transacting with the U.S. By potentially changing existing trade agreements, Trump argues it will ensure foreign countries pay their fair share for business conducted in the U.S. This plan may bring about significant alterations in international trade and tariffs, impacting consumer prices and the overall economic landscape.
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The establishment of the External Revenue Service could exacerbate trade tensions, particularly with countries that are significant trading partners of the U.S. While there may be an initial shock that leads to volatility in markets tied to trade (like consumer goods), certain sectors could benefit from less foreign competition in the long run. However, any economic disruption could hinder overall market performance in sectors reliant on international trade.
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